Any tips on migrating "mid-life" operating and finance leases? 1. Do I need to go through the standard process? Create a Lease record with the original details as if it's a new one? Generate the lease journal then reverse it? 2. For the lease interests that were previously recognized in the legacy system, do you still generate them in NS but reverse them manually? 3. How about the related mid-life ROU assets of those leases? Do I create them in the UI then do a CSV update import of the net book value, last depreciation period, etc. to drive the next depreciation after the cutover date?

1. yes, you do. you need the original date on the JE for the asset depreciation

Thank you, @Karina. I just have a follow up question on point 3. Can you elaborate on that?

on 3. - have you tried to create a lease in UI? you should because it sounds like you did not 🙂. If you did you would have seen the system generate journal out of the lease record. this journal is your future asset

Yes, I understand that part. Since my lease record shows the original lease details, the lease journal will reflect the original ROU and lease liability but in reality portion of the original ROU has been depreciated. When I generate the fixed asset related to the lease journal, it'll show the original asset cost and net book value instead of only the values as of the transition date. I was wondering if I have to edit those ROU asset records to reflect the current net book value, last depreciation date, etc. or is there any other way to create the mid-life ROU assets such as creating them as standalone mid-life assets just like any other regular mid-life assets (not linked to the lease record), etc.? Also, what I don't understand (pardon) is why there was a mention of subassets.

do not touch system generated journals. instead, reverse manually created transaction to date

Alright. So it's better to create the leased asset via UI which makes sense. But how do I update the related net book value, last depreciation date, etc.? Do I run the depreciation as of the last depreciation date in the old system then reverse them manually in NS? Or can I just edit the asset record to update the net book value, etc.?

your historic leases will have a journal date of the start lease date (say, Nov 1 2019), your asset will be created as of that date and then you will have to run depreciation to date (say, your go live date is Oct 1, 2022, so you run all your depreciations as of 9/30 2022 for all periods to date) and also you need to book all interest systematically. So now you have all these system enerated journals that match your system generated schedule and you also have ton of manual journals that are likely off by pennies. You will need to reconcile and reverse manual journals as of 9/30/2022

Gotcha. So, go through the standard process as if the leases originated in NS, run the system-generated transactions as of the cutoff date, then reverse those as well as of the cutoff date because they're already part of the historical TBs anyway.

@Luis - yes, it is a problem. you need to speak with your controller on this. Essentially you need to adapt NS calculations if you want to have NS as your system or records for leases. You controller needs to make adjusting journals, up to them on when and how.

Got it, thank you so much @Karina