You're almost there! Please answer a few more questions for access to the Applications content. Complete registration
Interested in joining? Complete your registration by providing Areas of Interest here. Register

Why accounting entries get generated for Purchase Option not yet exercised in Lease Accounting?

edited Sep 15, 2026 5:14AM in Lease Accounting

Summary:

Need to understand why accounting entries (Lease booking, Lease Expense (interest and amortization) and Payment approvals) get generated for Purchase option? Same is the case with Renewals options. Especially when these options are not yet exercised.

Content (please ensure you mask any confidential information):

I created a normal lease contract of EUR 1000 for 60 months, 1st Jan 2022 to 31st Dec 2026:

And then added an option for a one time Purchase option given to buy the lease around the last year (5th) of the lease duration:

Our questions are:

  1. Why the Purchase option related amounts get added to the generated schedules?
Tagged:

Howdy, Stranger!

Log In

To view full details, sign in.

Register

Don't have an account? Click here to get started!