Commence Lease

Use Case: 

How to make a lease available for journal entries. The lease commencement date is the date on which a lessor makes an underlying asset available for use by a lessee. At this date, the associated accounting will need to be triggered to establish that the entity has the right to use an asset and corresponding liability for future lease payments.

Prerequisite:

All lease details and the generated schedule should be double checked to ensure amounts and data is correct—specifically lease payment amounts and discount rates. Note that any desired changes to lease schedules after a lease has been commenced will need to take place via a lease modification.

Step By Step Process:

1. Navigate to the Leases and select the lease that you would like to commence. In this case, we will select the lease titles "Test 4".

2. Perform a final review to validate the following information is correct:

    a. Payment details, including prepayments, lease incentives, incremental borrowing rate, etc.

    b. Navigate to the Schedules subtab and ensure the lease table and balances/amortization activity are correct

3. Click the Lease Action button at the top of the lease record then choose Commence Lease to update the status of the lease record to Commenced.