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Create and classify a lease

When to use this​

Every contract that conveys the right to use an identified asset for more than 12 months — vehicles, real estate, IT hardware, machinery — gets a LeaseContract record. Short-term and low-value leases are still registered, but they post straight-line expense rather than RoU / liability (see Exemptions).

Steps​

  1. Lease Register → New Lease. Pick the administration scope; the rest of the form is auto-scoped.
  2. Identification. Fill in lease-number (your own scheme, e.g. VH-2026-001), lessor (counterparty from the organisations register), description.
  3. Asset and dates. Choose assetClass (vehicle / real-estate / IT-hardware / machinery / other), commencementDate, endDate, nonCancellableTermMonths. Add extensionOptions with each option's months and exercise likelihood (possible, reasonably-certain, unlikely).
  4. Payments. Pick paymentFrequency (monthly / quarterly / annual) and paymentTiming (in-advance / in-arrears), then enter basePaymentAmount and paymentCurrency.
  5. IBR. Enter ibrPercent and the derivation method (group-policy-matrix / yield-curve-plus-spread / weighted-average-external-debt / external-quote). Attach the derivation evidence (docudesk document FKs) in ibrEvidenceDocuments — the audit pack will pull them.
  6. Classification. Pick one of IFRS16-capitalised, short-term-exempt, low-value-exempt, operating-pre-IFRS16. The classification engine validates the choice against the asset class and term.
  7. Restoration obligation (optional). Add estimatedCost and discountRate if the contract obliges you to restore the asset at end-of-lease.
  8. Activate. Promote the lease from draft to active. The activation guard (LeaseContractGuard::guardActivation) verifies the classification is one of the four IFRS 16 enum values and every economic field is present (REQ-LC-004). If any check fails, the lease stays in draft and the missing fields are surfaced.

What happens on activation​

For IFRS 16-capitalised leases:

  • LeaseRecognitionService::recognise computes the opening lease liability (present value of the unavoidable payments under the IBR) and the opening RoU asset (= liability + initial-direct-costs + restoration-PV − incentives − prepaid-rent + accrued-rent).
  • A fixed-asset record is created with isRouAsset=true and sourceLease FK pointing back at the contract; the fixed-asset depreciation engine takes over from there.
  • A balanced journal entry is staged for the period-close engine: Dr. RoU asset, Cr. lease-liability-noncurrent (plus a Cr. lease-restoration-obligation line when present).
  • LeasePaymentScheduleService::generateSchedule materialises one LeasePaymentSchedule row per period (opening / closing liability, interest, principal split, depreciation).

For exempt leases, no schedule is written; the period-close engine posts a straight-line expense each period to the GL.

Where it lives​

  • Lease Register page: Bookkeeping → IFRS 16 Leases → Lease Register.
  • Lease Detail page: contract summary, IBR derivation, payment-schedule preview (next 12 months), reassessment history, GL posting totals.

Troubleshooting​

  • "Activation blocked: classification missing" — pick one of the four IFRS 16 enum values.
  • "Activation blocked: missing economic fields" — open the detail view, the missing fields are listed. Common omissions: paymentTiming, paymentCurrency, ibrPercent on exempt leases (zero is acceptable, blank is not).
  • "Schedule rows = 0" — only IFRS16-capitalised leases produce a schedule; exempt and out-of-scope leases write nothing.