NetLease Go-Live Overview

Go-Live Summary

The go-live process consists of the following steps:

1. Load leases using the CSV import tool or enter lease data via the user interface, then generate amortization schedules.
2. Commence the leases.
3. Initiate the system-generated journal entry to establish the proper go-live balances.
4. Manually reverse existing (pre-NetLease) balances as part of the transition process.

Prerequisites

The following steps must be completed prior to go-live:

• NetLease global settings configured – see NetLease - Global Settings for guidance
• Lease types and account mappings finalized – see NetLease Lease Type Configuration for guidance
• All leases loaded and reviewed – see NetLease Data Upload (Migration and Bulk Upload) & NetLease Data Validation for guidance

Go-Live Journal Entries

System-Generated Go-Live Entries (Per Lease | ASC 842 Standard)

NetLease will book a journal entry like the following for each lease:

• Debit: ROU Asset
• Credit: ROU Accumulated Amortization (as of go-live date)
• Credit: Lease Liability (as of go-live date)
• Debit/Credit: Go-Live Clearing Account

Manual Reversing Entries

As part of the go-live process, clients must reverse their pre-NetLease balances as of the go-live date. This is necessary because—as highlighted above—NetLease will generate entries to establish lease balances at go-live, and failing to reverse the previous balances would result in double counting on the balance sheet.

The specific manual reversing entry will depend on the accounting standard being transitioned from. Examples of typical manual entries that clients book are provided below: 

For ASC 842 Leases or ASC 840 Financing Leases:

• Credit: ROU Asset
• Debit: ROU Accumulated Amortization (as of go-live date)
• Debit: Lease Liability (as of go-live date)
• Credit/Debit: Go-Live Clearing Account

For ASC 840 Operating Leases:  

• Debit/Credit: Deferred Rent
• Credit/Debit: Go-Live Clearing Account

Important Notes

• The manual entry must be recorded as a native NetSuite journal entry, not a NetLease-specific custom transaction.
• Do not tag lease records to the manual reversing journal entry.
• Amounts for the manual reversing entry should be based on the lease balances on the balance sheet as of the day before the go-live date. 
• While NetLease creates a separate go-live journal entry for each lease, the manual reversing entry may be posted as a single combined journal entry.
• Amounts in the manual reversing entry may not exactly match the NetLease go-live entries. If they don't match exactly, the difference will be left in the go-live clearing account. This amount will then need to be reclassed to adjust either lease expense or retained earnings, depending on your accounting preference and how long the leases have been commenced.
• The combined effect of the NetLease go-live entries and the manual reversing entry should net to zero or a small transition adjustment. If using the "Recalculate Historical Amortization" method, any transition adjustment should be written off as of the go-live date.
• The manual reversing entry should be posted with a transaction date that matches the go-live date.
• Lease data should be thoroughly validated prior to go-live to ensure accuracy of the system-generated journal entries. Early validation helps identify and resolve discrepancies before go-live entries are posted.

For additional details, refer to the Run Go-Live Transition Journals article.