It should be possible to link a lease plan to a loan, which allows to track the purchase and depreciation of the leased asset.
The lease plan should be in line with the loan schedule, meaning that initial asset value should be equal to the loan amount and number and time of the depreciation bookings should correspond to the number and dates of the loan installments. Once the due date of the loan installments come, a journal entry should be posted to depreciate the asset. The release plan itself is static and should not change throughout the lifecycle of the lease.
Regarding the amounts of the depreciation bookings, ideally the following should apply:
· The depreciation curve can be linear or exponential.
· It should be possible to define a residual value at the end of the lease plan, similar to a balloon payment in a loan schedule.
· Once the time of the last installment/last booking comes, the customer can decide to either buy the object at the residual value or extend the lease plan, i.e. a new plan with a lower depreciation and residual value is created.