The Equipment lease-for Lessee is a new feature and part of Oracle Property Management systems. This Oracle Equipment lease-for Lessee provides the Lessee to manage their equipment lease portfolio in an effective and efficient manner and this feature also helps the lessee to meet the compliance requirement of IFRS and US GAAP.
The simple and most logic reason behind the introduction of equipment leasing –lessee accounting module is the crying need for equipment leasing industry-lessee. The current oracle E business suite support the Lessor transactions and contract management through Oracle lease and financial management in which equipment leasing in terms of Lessors view point, but doesn’t have the wings for Lessee accounting and operations.
The Property Manager (PN) already have the framework for the tenant accounting and operation captured with lease by defining real-estate properties and associate them with the lease contract, not Equipment’s. So it would be easier to use the same framework by extending the utilities to accommodate the equipment lease arm too.
Equipment Lease entities (Lessee) will need to change certain lease accounting practices when implementing the new leases standard, IFRS 16, issued by the International Accounting Standards Board (IASB) and ASC 842, issued by the Financial Accounting Standards Board (FASB). These new standards significantly impact the accounting for lessees for real estate lessee, equipment lease requiring them to recognize most leases (i.e., rental contracts) on their balance sheets as lease liabilities with corresponding right-of-use-assets.
For more information on equipment lease functionality, setup involved while implementing it etc, please refer Doc ID 2432815.1