What is lease classification in SAP FI-AF-SAI - Simplified Accounting Integration?

SAP Term: lease classification

• Component: FI-AF-SAI

• Component Name: Simplified Accounting Integration

• Description: From an accounting point of view, a leasing contract must be classified either as a finance lease or as an operating lease. The rules specified by an accounting principle provide the basis for classification. Different accounting principles usually provide different classification rules. For example, a contract that is classified as a finance lease according to IFRS might be classified as an operating lease according to a local accounting principle.

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• Key Concepts: 
  Lease classification is a feature of the FI-AF-SAI Simplified Accounting Integration component of SAP. It allows users to classify leases into different categories, such as operating leases and finance leases, for accounting purposes. This helps to ensure that the correct accounting treatment is applied to each lease. 
  
  How to use it: 
  In order to use the lease classification feature, users must first define the different categories of leases in the system. This can be done by creating a new lease classification type in the system. Once this is done, users can assign each lease to one of the defined categories. This will ensure that the correct accounting treatment is applied to each lease. 
  
  Tips & Tricks: 
  It is important to ensure that all leases are correctly classified in order to ensure accurate accounting treatment. It is also important to keep track of any changes in the classification of a lease over time, as this may affect the accounting treatment applied to it. 
  
  Related Information: 
  For more information on lease classification in SAP, please refer to the SAP Help documentation on FI-AF-SAI Simplified Accounting Integration.