What's the Accounting Logic when Exercising a Renewal Option on a Lease? — Cloud Customer Connect
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What's the Accounting Logic when Exercising a Renewal Option on a Lease?

in Lease Accounting 1 comment

Summary:


What's the Accounting Logic when Exercising a Renewal Option on a Lease?

Content (please ensure you mask any confidential information):

After exercising a Renewal option on a lease and run the Create Accounting process, two accounting events are generated:

  1. Lease Termination
  2. Lease Revision

Can anyone clarify the accounting logic behind these two events? Specifically, why is a Lease Termination triggered along with the Revision, and how are the Right-of-Use (ROU) asset and liability balances treated in this scenario?

Version (include the version you are using, if applicable):

25B

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