NetLease - FX Journal Entries with Multibook
Overview
This article outlines the journal entries that are generated when you have an FX lease along with multi-book. FX leases are when the contract currency of a lease differs from the subsidiary's functional currency, FX adjustment entries will be booked by NetLease. Multi-book journal entries may be desired when you want to record something different than what was recorded in the primary books. Entries are posted separately to the primary book and the secondary book.
Prerequisites
In order to post a journal entry to both the primary and secondary books, you have to first ensure that you have correctly configured your multi-books accounting within a lease record, generated amortization schedules and commenced the lease. The type of journal entry produced by multi-book depends on what information is entered in the lease record. Review the various scenarios and corresponding entries that are created here.
To view the FX adjustment entries from the lease record, the "Operating Schedule - FX" and "Financing Schedule-FX" sublists must be unhid. To do this, navigate to the Foreign Exchange Journal Entry Article
Step-by-Step Process
When monthly journal entries are run, there will be a total of three journals created. Each are depicted below.
The NetLease amortization entry will record the monthly amortization of the ROU asset against accumulated amortization, recognize interest and payment, and reduce lease liability in the primary book.
The FX adjustment entries will show a remeasurement related to the lease due to the difference in currencies. To see FX adjustment entries from the lease record, navigate to Amortization Schedules > Operating Schedule-FX or Financing Schedule-FX (depending on whether the lease is classified as operating or financing). At the far right will be linked to the FX adjustment entries.
Multi-Book will generate a book specific entry similar to the primary book amortization entry, but for the secondary accounting book that is listed in the lease record.
Note: The multi-book example above is when the Accounting Book Field and the Secondary Book field are populated in the lease record. For other scenarios of multi-book journal entries visit NetLease - Full Multi-Book Combinations and Implications.