Processes Triggered by Lease Modifications

When you apply modifications to your lease, the following processes are triggered:

• A lease modification journal entry is created to record adjustments to the Lease Liability and Right-of-Use Asset accounts.

• A reversal interest journal entry is recorded to reverse the interest expense on lease payments after the effective date of modification

• The lease modification journal entry is linked to the new Lease Modification DHR. The Asset Current Cost and Net Book Value are then updated.

  Note:

  You should use Straight Line Remaining Depreciation Method since the depreciation after modification is computed based on the current net book value or remaining life. If you use other depreciation methods, like Straight Line, depreciation after modification is computed as Current Cost divided by the Asset Life.

General Notices