Assets that are Subject to a specific security interest such as leased assets, cannot be realised until the asset's owner has been fully paid out. This is because the ownership in the asset does not vest in the company until the owner has been paid out and the security interest has been discharged. The application will prevent you from realising an asset that has not been paid out.
This process will also handle the correct treatment of the residual claim (which may in turn become unsecured if the asset value realised is less than the secured claim).
1. Process the Payout
Click on Assets -> Double click on the Asset Register then double click on the leased asset you are paying out.
Click on as indicated in the first screen shot above.
Retain / Payout
Enter the payout figure (retain will be automatically ticked) and then click Save. Clicking the Retain tick box will not complete the payout. this option is used where you are expecting to receive further payout amounts. The asset is not available to be realised until the asset has been paid out in full.
Tick Retain to fully pay out the lease.
Confirm that the payout figure is correct and enter GST if applicable. and click OK and then click Exit and then Save and Exit.
You will note the realised amount of $60,000 is in negative ($60,000). This reflects that the asset has been paid out. Once the asset is sold, this negative amount will be offset against the total amount realised for the asset.
2. Realising the Asset
From the Asset Register right click on the asset and select Realise this Asset.
3. Pay the Secured Creditor
An account payable to the leaseholder creditor will have been created by running the payout process. Simply pay the account payable to remit the funds to the secured creditor.