NetLease - Transition methods and go-live overview
Overview
Going live in NetLease takes three steps:
- Load leases with the NetLease - Lease Bulk CSV Upload or enter them on the lease record, then generate the amortization schedules.
- Run the go-live journals so that NetLease books the opening balances.
- Book a manual journal entry that reverses the existing lease balances from the prior system.
Before you load leases, choose one of the two transition methods below: historical or current fiscal year. The method decides which dates, terms, and payments go on each lease.
Prerequisites
Complete these steps before go-live:
- Finish the NetLease global settings. See NetLease - Global settings.
- Finalize lease types and account mappings. See NetLease Lease Type Configuration.
- Load and review the leases. See NetLease - Lease Bulk CSV Upload and NetLease Data Validation.
Historical transition method
With this method, NetLease builds each lease's amortization schedule from the start of the original lease term.
Benefits of the historical method
- Keeps reporting flexibility and a full history of each lease's amortization schedule.
Drawbacks of the historical method
- Past lease modifications must be entered one at a time by following NetLease Lease Modification Before Go-Live.
- A small transition adjustment is possible if historical amortization amounts don't line up exactly.
Enter each lease as follows:
| Field | What to enter |
|---|---|
| Commencement Date | Original commencement date of the lease contract |
| Lease Term (months) | Full original lease term |
| Initial Lease Payment | Original payment amount in the first month of the lease term |
| Discount Rate % | Original incremental borrowing rate for the lease |
| Lease payment schedule | Entire payment schedule from the original commencement date |
Current fiscal year transition method
With this method, NetLease starts each lease's schedule at a cutover date and builds the lease liability from the remaining payments. Existing ROU asset balances come over through two fields: ROU Adjustment and ROU Asset Accumulated Balance At Commencement Date.
If a modification before the cutover date changed the discount rate, term, or payments, enter the values in effect at the cutover date. Modifications after the cutover date are entered separately. See NetLease Lease Modification Before Go-Live.
Benefits of the current fiscal year method
- No transition adjustment is needed when the go-live date is the same as the cutover date. If go-live is later, a small adjustment can come from activity between the two dates.
- Modifications made before the cutover date don't have to be entered. Their effects are already in the cutover inputs.
Drawbacks of the current fiscal year method
- The NetLease subledger and reports have no history for periods before the cutover date. If that history is needed, use the historical transition method.
Enter each lease as follows:
| Field | What to enter |
|---|---|
| Commencement Date | The cutover date, usually the first day of the current fiscal year. A different date can be used, but no reporting is available for periods before it. |
| Lease Term (months) | Remaining months from the cutover date, not the full original term |
| Initial Lease Payment | Payment amount in the cutover month |
| Discount Rate % | The discount rate in effect for the lease at the cutover date: the original incremental borrowing rate, or the rate from the most recent remeasurement if a modification changed it. Not a current market rate. |
| Lease payment schedule | Payments from the cutover month forward only, including every future escalation |
| ROU Adjustment | Net ROU - Lease Liability. See the section below. |
| ROU Asset Accumulated Balance At Commencement Date | Gross ROU - Net ROU, or leave blank. See the section below. |
Carrying over ROU balances with the current fiscal year method
NetLease calculates the lease liability from the remaining payments. On the ROU side, it calculates the opening balances as follows:
- Net ROU = Lease Liability + ROU Adjustment (plus Prepaid Lease Payment and Initial Direct Costs, minus Lease Incentives Received, if those fields are filled in)
- Gross ROU = Net ROU + ROU Asset Accumulated Balance At Commencement Date
- Accumulated amortization = ROU Asset Accumulated Balance At Commencement Date
ROU Adjustment sets the net ROU value, so it is always Net ROU - Lease Liability as of the cutover date. Enter a negative amount when net ROU is less than the liability.
ROU Asset Accumulated Balance At Commencement Date doesn't change net ROU. It only splits the net amount into a gross balance and an accumulated amortization balance. Whether to fill it in depends on how the current general ledger holds the ROU asset:
| If the current GL shows... | ROU Adjustment | ROU Asset Accumulated Balance At Commencement Date |
|---|---|---|
| A single net ROU balance | Net ROU - Lease Liability | Leave blank |
| A gross ROU balance and a separate accumulated amortization balance | Net ROU - Lease Liability | Gross ROU - Net ROU |
If the accumulated balance is left blank, NetLease records amortization after the cutover date in the Accumulated Amortization account, so that account builds up from zero starting at the cutover date.
The goal is for the NetLease go-live entry to post to the same accounts, for the same amounts, as the balances it replaces. That way the manual reversing entry cancels it out cleanly.
Don't use gross ROU in the ROU Adjustment
NetLease adds the accumulated balance on top of net ROU to get gross. If the ROU Adjustment is calculated from gross ROU and the accumulated balance is also entered, the accumulated amortization is counted twice and both net and gross ROU are overstated.
Example
As of the cutover date, the prior system shows a lease liability of 50,000, gross ROU of 60,000, and accumulated amortization of 8,000, so net ROU is 52,000. NetLease calculates the same 50,000 liability from the remaining payments.
| ROU Adjustment | Accumulated Balance | NetLease net ROU | NetLease gross ROU | |
|---|---|---|---|---|
| GL holds net ROU only | 2,000 | blank | 52,000 | 52,000 |
| GL holds gross and accumulated | 2,000 | 8,000 | 52,000 | 60,000 |
| Incorrect: ROU Adjustment from gross | 10,000 | 8,000 | 60,000 | 68,000 |
Both fields are on the Accounting subtab of the lease record.
Transition journal entries
NetLease books this entry for each lease:
- Debit: Gross ROU asset value
- Credit: ROU accumulated amortization at the go-live date
- Credit: Lease liability
- Debit/Credit: Go-Live Clearing account (a plug that balances the entry)
Book this manual entry for each lease:
- Credit: Gross ROU asset value
- Debit: ROU accumulated amortization at the go-live date
- Debit: Lease liability
- Credit/Debit: Go-Live Clearing account (a plug that balances the entry)
How to book the manual reversing entry
- Book it as a native NetSuite journal entry, not a NetLease transaction.
- Don't tag lease records on the manual reversing entry.
- One combined journal entry can reverse all leases, even though NetLease creates a separate go-live entry for each lease.
- Use the same clearing account and amount as the NetLease go-live entry, so the clearing account nets to zero.
- Reverse the other lines at the prior system's balances.
- If the entry doesn't balance, record the difference as a transition adjustment as of the go-live date.
For example, with a cutover date of 1/1/2026 and go-live on 4/1/2026, NetLease's go-live entry uses the balances as of 3/31/2026. When those balances tie to the prior system, the two entries look like this:
| Account | NetLease go-live entry | Manual reversing entry |
|---|---|---|
| ROU Asset | Dr 60,000 | Cr 60,000 |
| Accumulated Amortization | Cr 12,500 | Dr 12,500 |
| Lease Liability | Cr 45,800 | Dr 45,800 |
| Go-Live Clearing | Cr 1,700 | Dr 1,700 |
With the historical method, a transition adjustment comes from differences in historical amortization. With the current fiscal year method, it comes from differences in activity between the cutover date and go-live.
Limitations / things to be aware of
- Multi-book. Each lease has one ROU Adjustment field and one ROU Asset Accumulated Balance At Commencement Date field. If accounting books carry different cutover balances for the same lease (for example, operating in the primary book and finance in a secondary book), the fields can't be set separately per book.
Troubleshooting
Use this table when validating leases entered with the current fiscal year method.
| Symptom | Check | How to fix |
|---|---|---|
| Lease liability doesn't match | Discount Rate % matches the rate the prior system uses at the cutover date | Use the original rate, or the updated rate from the last remeasurement. |
| Lease Term (months) is the remaining months | Count the months from the cutover date to the end of the lease, not the full original term | |
| Payment schedule starts in the cutover month | Remove any past payments and include every future escalation | |
| Payment Timing (NPV Calc) matches the prior system | Set it to In Advance or In Arrears, the same as the prior system | |
| Comparing the right legacy balance | Use the prior system's balance as of the cutover date, before that month's activity | |
| Liability ties, net ROU doesn't | ROU Adjustment formula and sign | Use Net ROU - Lease Liability. Enter it as a negative number when net ROU is less than the liability. |
| Prepaid Lease Payment, Initial Direct Costs, or Lease Incentives Received filled in | Leave them blank. The prior system's net ROU usually already includes these amounts, so the ROU Adjustment would count them twice. | |
| Net ROU ties, gross or accumulated amortization doesn't | ROU Asset Accumulated Balance At Commencement Date | Enter Gross ROU - Net ROU, or leave it blank if the GL holds only a net ROU balance |
| Balances tie at period 0 but not at go-live | Monthly activity between the cutover date and go-live | Compare each month's interest, payment and ROU amortization to the prior system. Look at Payment Timing (NPV Calc) and any modification in that window. Record small remaining differences as a transition adjustment as of the go-live date. |
After changing any of these fields, regenerate the amortization schedule. Then compare the initial balance line (period 0) to the prior system's balances as of the cutover date.
Record structure
| Field Name | Field Type | Description | Example | Field ID |
|---|---|---|---|---|
| Commencement Date | Date | Start of the NetLease schedule. For the current fiscal year method, the cutover date. | 1/1/2026 | custrecord_laa_ls_commencement_date |
| Lease Term (months) | Integer Number | Full term (historical) or remaining months (current fiscal year) | 36 | custrecord_laa_ls_term |
| Initial Lease Payment | Currency | Payment in the first month of the schedule | 2,500.00 | custrecord_laa_ls_initial_payment_amount |
| Discount Rate % | Percent | Rate in effect at the cutover date: the original incremental borrowing rate, or the updated rate from the most recent remeasurement | 5.00% | custrecord_laa_ls_inc_borrowing_rate |
| Payment Timing (NPV Calc) | List/Record | Whether payments are discounted in advance or in arrears | In Arrears | custrecord_laa_ls_payment_timing |
| ROU Adjustment | Currency | Net ROU - Lease Liability as of the cutover date | 2,000.00 | custrecord_laa_ls_rou_adjustment |
| ROU Asset Accumulated Balance At Commencement Date | Currency | Gross ROU - Net ROU as of the cutover date. Leave blank if the GL holds net ROU only. | 8,000.00 | custrecord_laa_ls_asset_accum_balance |
