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Entering a lease (finance lease)

⏱ 7 min readUpdated on

An asset taken under a finance lease (location-financement / financieringshuur) enters the balance sheet as if the business had bought it on credit: an asset, a debt. But no money arrives at the bank — money only goes out, with each lease payment. Fiplan treats it this way, following Opinion 2015/4 of the Belgian Accounting Standards Commission (CNC / CBN).

What it is for

In the Financing & Contributions module, a 172… account (finance lease debts) is recognised as Leasing / Finance lease. The window then asks for what the contract and the asset require: the amount, the rate, the contract term, and the asset's useful life, which may be longer.

Steps

  1. Open Encoding, then Financing & Contributions, and click New.
  2. Choose the PCMN Account 172000, an account of the Belgian minimum chart of accounts (PCMN / MAR): Fiplan shows “Leasing / Finance lease”. Give a Title.
  3. Leave New contract as it is (the box is used to take over a contract already running; see the pitfalls).
  4. Enter the Financing amount (excl. VAT), the Leasing company and the VAT rate of the lease payments.
  5. Enter the asset's Useful life (years) and choose the Nature of the asset — the journal records the asset on the account of that heading 25 (250, 251 or 252; 251000 for the bakery's oven); then, if there are any, the Increased first instalment and the Purchase option.
  6. Choose Funds made available (the month the asset is delivered), the First instalment, the contract's Duration (years), the Annual interest rate (%) and the Repayment frequency.
  7. Read the repayment schedule on the right and click Save.
The “New line — Financements & Apports” window on account 172000: a €24,000 oven, 5 years, 5%, useful life 8 years.
The “New line — Financements & Apports” window on account 172000: a €24,000 oven, 5 years, 5%, useful life 8 years.

Worked example · Boulangerie Dupont SRL

A deck oven under a finance lease: €24,000.00, over 5 years, at 5%, monthly lease payments, delivered in January 2027, purchase option of €240.00, useful life of the oven 8 years, VAT left at 0% (the screen's default).

The asset and the debt are worth the part of the contract that repays the principal: the amount less the purchase option, which is not recorded in the balance sheet.

value of the asset and of the debt(1)

The first lease payment falls in February 2027, the month after delivery: €448.38, of which €349.38 is principal and €99.00 interest. The oven is depreciated over its 8 years of useful life, not over the 5 years of the contract.

2027Amount
Lease payments made (11): principal portion3,924.27
Lease payments made: interest portion (650000)1,007.91
Depreciation charge (630200)2,970.00
Net book value of the oven at 31 December20,790.00
Lease debt at 31 December19,835.73
of which repayable in 2028, shown under amounts falling due within one year (422000)4,490.75

Pitfalls

No money comes in. Unlike a loan, the delivery posts no cash inflow at the bank: the asset and the debt arise together. Do not enter the asset a second time in Investments.
The useful life is required. Fiplan proposes none and never replaces it with the contract term: without it, the window does not save the line. A line saved before this rule, without a useful life, is not posted to the journal: the check Leases: useful life of the asset names it, and its button opens the line.
Land is not depreciated. For a “Land and buildings (250)” asset, enter the Land value: it stays on the assets side, only the building is depreciated (Royal Decree of 29/04/2019, art. 3:42). Without that value, Fiplan depreciates the whole asset and says so.
Taking over a running contract. Tick the box for a contract already signed: no funds are released, the outstanding principal is taken over on the liabilities side, and the price paid to the transferor is added to the asset's value. For an existing company, running leases are better declared with the prior-year (N-1) balance sheet.
A “furniture and vehicles” asset: the car question. For the type Furniture and vehicles (252) — the one the window proposes by default —, the window asks the same question as for an investment: Is this a car within the meaning of art. 66 ITC 92?. Yes asks for the Deductible share (%); the non-deductible share of the asset's depreciation is then added back as a disallowed expense (see Entering an investment). The bakery's oven, under machinery, is not concerned.
VAT on the lease payments. The VAT treatment of a lease is not modelled. With a VAT rate above 0%, the plan pays and deducts VAT on the principal amounts the window stores (their calendar starts in the month of delivery), not on the interest nor at the pace of the lease payments. The window says so under its summary, and the “Leases: VAT” check names the line in Plan checks. Check the VAT against the contract.

What it changes · 2027

① Income statementInterest and depreciation-€1,007.91In interest, plus €2,970.00 of depreciation on the oven.
② CashThe lease payments made-€4,932.18Principal and interest of 11 lease payments; nothing came in at delivery.
③ Balance sheetThe oven, on the assets side€20,790.00And on the liabilities side, a lease debt of €19,835.73.

Source

CNC Opinion 2015/4 (finance leases): the asset and the debt are worth the part of the lease payments that repays the principal; each payment splits into principal and interest; the asset is depreciated over its useful life; the purchase option is not carried in the balance sheet.

Minimum standard chart of accounts (plan comptable minimum normalisé / minimumindeling van een algemeen rekeningenstelsel): accounts 172 (finance lease debts), 25 (fixed assets held under finance leases), 422 (portion falling due within one year), 650 (debt charges).

Income Tax Code 1992 (CIR 92), Article 66 (amended by the Law of 25 November 2021): the deductible share of the costs of a car, a dual-purpose vehicle or a minibus, entered by the accountant (voiture-dna.ts).

Fiplan conventions, declared in the code (leasing.ts): a period's interest is calculated on the principal outstanding before it (paid in arrears); the first lease payment falls in the month after delivery; the increased first payment counts as repaying principal (a point the opinion leaves open); accumulated depreciation goes to account 259000.