We have a scenario for rental lease.
We lease out machines to customers for a period say 2 years. Till two years machine is with our ownership and we getting the rent for this. As the lease expires, the ownership gets transferred to Customer.
How to account for the cost in this scenario...?
Christian Ortner replied
for the first 2 years the asset belongs to you => aset master record in asset accounting. Post the periodic depreciation to a CO-order (by assigning this in asset master data), post the rent earned to the same CO-order. The order shows the result of this business transaction (and can be settled elsewhere eg to CO-PA).
After the lease contract expires sell the asset to the customer (eg T-code F-92).