> For the complete documentation index, see [llms.txt](https://learn.tryonederful.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://learn.tryonederful.com/ifrs-16/setup-documentation.md).
# Setup Documentation
This document is a system guidance for IFRS16 solution setup, which must be completed for starting to use IFRS16 solution on Dynamics 365 Business Central.
## User Setup
Two additional permission fields are available in the User Setup page. Appropriate permissions must be assigned to users based on their responsibilities.
* Allow Create Lease Schedule
* Allow Confirm Lease Schedule
Users with the **Allow Create Lease Schedule** permission can:
* Create lease schedules.
* Recalculate schedules after variable interest rate changes.
* Create new schedule versions from existing schedules.
* Clone schedules.
Users with the **Allow Confirm Lease Schedule** permission can:
* Confirm lease schedules.
* Recalculate schedules after variable interest rate changes.
* Post fixed asset disposals.
* Post early lease terminations.
* Clone schedules.
## IFRS 16 Setup
The IFRS 16 setup pages can be accessed from the Administration menu.
Explanation of fields:
* **Contract Number Nos. -** Number series used for IFRS 16 contract numbering.
* **Schedule No. Dimension Code -** Dimension code used to track IFRS 16 schedules.
* **Create Schedule Dimension -** If enabled, the system automatically creates and assigns schedule dimension values to transactions posted through the IFRS 16 module.
* **Schedule No. Separator Symbol -** Defines the separator used between the contract number and schedule number. If "-" is used, the first schedule created for contract IFRS00001 will be numbered IFRS00001-01.
* **IFRS FA Depreciation Book -** Default depreciation book used for Right-of-Use Assets.
* **Fixed Asset Number Nos. -** Number series used for Right-of-Use Asset numbering.
* **IFRS FA Posting Group -** Default posting group assigned to newly created Right-of-Use Assets.
* **Initial Right-of-Use FA Type -** Default FA posting type used when confirming a lease schedule.
* **Debit Right-of-Use FA Type -** Used when a lease amendment increases the carrying amount of the Right-of-Use Asset.
* **Credit Right-of-Use FA Type -** Used when a lease amendment decreases the carrying amount of the Right-of-Use Asset.
* **FA Allocation Setup Mandatory -** If enabled, an allocation template must be assigned before a lease schedule can be confirmed.
* **Default IFRS Dimension Allocation Template -** Default dimension allocation template assigned to new assets.
* **Depreciation Starting Date Set Method -** Defines how the depreciation start date is determined.
* **Depreciation Ending Date Set Method -** Defines how the depreciation end date is determined.
* **Short & Long Term -** Specifies whether lease liabilities are split into short-term and long-term portions.
* **Short Term Liabilities Period -** Defines the period considered short-term for liability classification.
## IFRS Dim. Allocation Templates Setup
If depreciation and interest expenses need to be allocated across dimensions, allocation templates must be configured.
Multiple allocation templates can be created. If an allocation template is assigned to a Right-of-Use Asset, depreciation and interest expenses will be distributed according to the percentages defined in the template.
## FA Posting Groups
Configure the FA Posting Groups that will be used for Right-of-Use Assets. In addition to the standard FA Posting Group fields, complete the IFRS 16-specific accounts shown below.
Explanation of fields:
* **Depreciation Expense Account** - General Ledger account used for ROU Asset depreciation expenses.
* **IFRS16 Lease Long-Term Liabilities** - General Ledger account used for long-term lease liability postings.
* **IFRS16 Lease Short-Term Liabilities** - General Ledger account used for short-term lease liability postings.
* **IFRS16 Accruals Interim Credit Account** - General Ledger account used for lease accrual postings.
* **IFRS16 Interest Expenses** - General Ledger account used for interest expense postings.
## Source Code Setup
Source Codes are used to identify and track transactions created by the lease accounting module. Configure the source codes below to ensure lease-related postings can be distinguished from other transactions in the General Ledger.
Create and assign the following source codes to track IFRS 16 transactions:
* **IFRS Liability Source Code** - Used for lease liability transactions.
* **IFRS Accruals Source Code** - Used for lease accrual transactions.
* **IFRS FA Disposal Source Code** - Used for Right-of-Use Asset disposal transactions.
