NetLease - Run Monthly Short-Term/Long-Term Reclass

Overview

Lease liability transactions are recorded in NetLease under the primary lease liability account defined during lease type configuration. This account should be classified on the balance sheet as a long-term liability.

At specified intervals (e.g., monthly), a journal entry can be generated and linked to each lease to reclassify the short-term portion of the liability from the long-term lease liability account to the designated short-term lease liability account specified on the lease type record. A reversing journal entry is automatically created on the following day to undo the reclassification. When performed monthly, quarterly, or annually, this process ensures accurate classification of the short-term lease liability at period close.

Prerequisites

All lease transactions that affect the lease subledger details—such as new leases, modifications, impairments, and terminations—should be completed prior to generating monthly lease journal entries. Additionally, the status of any leases that have commenced should be updated accordingly. The reclassification of short-term and long-term lease liabilities typically occurs after amortization entries have been processed. 

Step-by-Step Process

  • To access the Monthly Reclass Journal Processing page, navigate to: NetLease > Process Monthly Transactions > Monthly Reclass Journals.
  • Apply filters as necessary to identify the leases to be included in the reclassification process: 

Field

Description

Example

Period

Select the period for which transactions are to be recorded. 

Jan 2025

Reclass Journal Type

The Reclass Journal Type defaults to Short Term/Long Term Reclass; leave this as the default setting. 

Short Term/Long Term Reclass

Lease Status

Filter by lease status to determine which leases will have reclass journals generated. Except in catch-up scenarios, reclass journals are typically run only for leases with a commenced status.  

Commenced
Subsidiary

Filter by subsidiary to run entries only for the selected subsidiary. Leaving this field blank will apply the process to all subsidiaries. 

Company, Inc.
Location

Filter by location to run entries only for the selected location. Leaving this field blank will apply the process to all locations. 

Las Vegas
Lease Type

Filter by lease type to run entries only for the selected lease type. Leaving this field blank will apply the process to all lease types. 

Real Estate
Lease

Filter for a specific lease to record reclass entries. Leaving this field blank will apply the process to all leases. 

LA0370
  • After applying filters, select the checkboxes next to the leases for which reclass entries will be processed, then click Generate Transactions:

  • Refresh the page that follows until the Processing Status shows Complete and the journal entries appear in the batch summary:

  • Click the Journal Entry link to review the reclass journal entry. In this entry, the long-term account is debited—or a contra account, depending on the lease type GL account mapping—and the short-term account is credited:

  • Access the associated reversal entry by clicking the hyperlink in the Reversal # field on the main journal entry. Both the original and reversal entries are automatically created when the reclass journal is generated:

  • Note that both reclass journal entries are linked to the lease record and can be viewed by navigating to the lease and checking the Other Related Transactions sublist under the Related Records subtab:

  • Reclass journal entries are also linked to the corresponding NetLease schedule line record under the Reclass Information subtab:

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