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How to ensure the ROU Asset is amortized/depreciated to zero
How to ensure the ROU Asset is amortized/depreciated to zero

This article explains when there is a purchase option you have the option to ensure the ROU asset amortized/depreciated to zero.

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Written by Support
Updated over a year ago

This article only applies to IFRS 16, GASB 87, and Finance Leases under ASC 842 for a lessee.

In the Initial Recognition tab, under Right of Use Asset, you have the option to determine if you want to amortize/depreciatethe asset to zero, including the purchase option:

If you do not want to depreciate/amortize the purchase option amount to zero, leave the check box De-recognize ROU Asset at Purchase Option Amount checked.

If you want the total ROU asset to zero, uncheck De-recognize ROU Asset at Purchase Option Amount.

#purchaseoption #amortizetozero

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