Setup Considerations: Multibook Asset Accounting for Leases
You can use this topic to help make decisions when planning your configuration and use of multibook asset accounting when you want to use lease accounting. It explains:
- Why to set it up.
- How it fits into the rest of Workday.
- Downstream impacts and cross-product interactions.
- Security requirements and business process configurations.
- Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.
What It Is
Multibook asset accounting tracks an asset in multiple books and enables you to meet statutory reporting requirements for lease contracts. You set up the accounting methods used in each book to track and report on the same asset for different accounting standards.
Business Benefits
This functionality helps you comply with standards under U.S. Generally Accepted Accounting Principles (GAAP), U.S. Governmental Accounting Standards Board (GASB), and International Financial Reporting Standards (IFRS). Enabling multibook asset accounting makes it easier for you to:
- Register and depreciate the same assets multiple ways.
- Assign assets to the appropriate accounting books.
- Prepare financial statements under multiple accounting standards.
Use Cases
- Your organization has operating lease contracts under both ASC 842 and IFRS 16. The organization registers assets and associates them with the contract under IFRS 16 to record depreciation and amortization expense. Under ASC 842, the organization doesn't register and associate assets with the contract. You amortize assets through the expense recognition schedule or lease expense for ASC 842. Workday adds the asset to the IFRS book but not the GAAP book.
- Your organization has operating lease contracts under both IFRS 16 and IAS 17. The organization registers assets and associates them with the contract under IFRS 16 to record depreciation and amortization expense. Under IAS 17, the organization doesn't register and associate assets with the contract. You don't require balance sheet presentation for operating leases before the new standards. Workday adds the asset to the IFRS 16 book, but not the book under the former IFRS standards.
- Your organization has operating lease contracts under GASB 87 and must also report under former GASB standards. The organization registers assets and associates them with the contract under GASB 87 to record depreciation and amortization expense. Under the former GASB standards, you don't register and associate assets with the contract. You don't require balance sheet presentation for operating leases before the new standards. Workday adds an asset to the GASB 87 book, but not the book under the former GASB standards.
Questions to Consider
Questions | Considerations |
|---|---|
Which accounting standards do you need to prepare for? | You don't need to enable multibook asset accounting when you prepare financial statements for:
|
Do you need to depreciate assets over the term of the lease contract? | If yes, use the term depreciation method to depreciate the asset on a straight-line basis for the length of the contract. Otherwise, you can use any other depreciation method, but you must update the asset book rules to match the depreciation profile. |
Recommendations
- For operating leases under IFRS 16 or GASB 87, don't use the same book codes that you use for lease-type supplier contracts when you report under multiple standards. Different book codes help prevent duplication of asset cost and depreciation expense when reporting. You can combine these book codes in a single book to simplify reporting.
- Set up account posting rules for theMultibook Settlementledger account with theSpend Categorydimension to record journal entries.
- Register leased assets through a supplier contract receipt and include theInitiate Asset Registration Events from Receipt for Supplier Contractsservice step in theReceiptbusiness process.
- Decide which books to use for what accounting standards. Assign or restrict assets to specific asset books based on your needs.
- Set up depreciation profiles to automatically create depreciation schedules for your assets when you register them.
Requirements
Enable these functional areas to create financial leases and operating leases with an accounting method of right-of-use (ROU) asset depreciation expense:
- Business Asset Accounting
- Business Asset Tracking
Limitations
No impact.
Tenant Setup
To enable asset accounting for multiple books, select the
Enable Multibook Asset Accounting
check box in the Business Assets Options
section on the Edit Tenant Setup - Financials
task. Also enable Lease Accounting
on the Edit Tenant Setup - Financials
task. After enabling the tenant-level option, assign book codes to the asset accounting books for your company. Security
Domains | Considerations |
|---|---|
Set Up: Ledger and Book in the Common Financial Management functional area | Provides access to set up book codes and books for asset accounting. |
Set Up: Accounting Rules in the Common Financial Management functional area | Provides access to set up account posting rules. |
These domains in the Business Asset Accounting functional area:
| Provides access to map asset books to companies and assign book codes to accounting books. |
Set Up: Business Asset Accounting in the Business Asset Accounting functional area | Provides access to maintain asset books and create depreciation profiles and schedules. |
Business Processes
No impact.
Reporting
Use the
Assets Net Book Value
report to:
- View the net value of individual assets in a company.
- View accumulated and year-to-date depreciation.
Integrations
No impact.
Connections and Touchpoints
Multibook asset accounting for leases interacts with these other areas in Workday:
Features | Considerations |
|---|---|
Lease accounting | Configure multibook asset accounting for use with lease accounting to help you report on IFRS or GASB and alternate lease-type supplier contracts for different accounting standards. |
Supplier contracts | Select a supplier contract type when you create a supplier contract.
Based on your configuration, Workday determines whether to treat your lease-type supplier contracts as:
|
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships across your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.