3574195 - Warning Message When Releasing a Leasing Contract: 'Right of use asset is not required for lease contract XYZ'.

• A warning message displays when releasing a Lease Contract.
• As a result of the message, the Right Of Use Asset is not created.
• The warning message displayed is: 'Right of use asset is not required for lease contract XYZ'

(XYZ represents the Lease-In Contract ID)

SAP Business ByDesign

1. Go to Lease Contract Management work center.
2. Go to Lease Contract view.
3. Open the Lease-In Contract: XYZ and go to "Lease Objects" tab.
4. Here even with the status as "Released" the Right Of Use Asset (ROU) was not created.

The Set of Books (SoB) relevance is set to "Expense". When relevance is set as "Expense", the Lease Contract is created as a "Service" contract, which prevents the creation of an ROU asset.

Follow the steps below to check the same:

1. Go to Lease Contract Management work center.
2. Go to Lease Contract view.
3. Open the Lease-In Contract: XYZ > Go to "Lease Objects" tab, and go to "Set of Books Relevance" sub-tab.
4. Here we can see the relevance is set to "Expense" for SoB DEF (DEF represents the Set of Books ID).

If no Lease Valuation type is selected for SoB DEF. The default relevance is automatically set to "3 - Expense". 

The lease valuation type can be either "2 - ASC842" or "1 - IFRS16" to allow the Financial Lease Relevance which then allows to generate ROU asset. The available accounting principles and their assigned lease valuation types and default posting relevance can be reviewed by following the steps below:

1. Go to Business Configuration work center.
2. Go to Overview view. 
3. Search for activity: "Lease Management Accounting" and open it. 
4. Open the option "Default Posting Relevance for Lease Valuation Type".
5. Select the desired "Lease Valuation Type" and the "Default Relevance" for each Accounting Principle.

Lease Management: Configuration Guide 

Lease Contract Management, Lease Contract, Lease-In Contract, Set of Books, Expense, ASC842, IFRS16, Financial Lease Relevance, ROU asset, missing, fixed asset profile. , KBA , AP-ACC-LM , Accounting Lease Management , How To