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PLM Property Lease Management Setup

Use this page to set up the general default settings for creating leases in on the PLM Lease page. These values (unless otherwise noted) can be changed at the time a lease is created.

Set Up Default Values

To set up the general default values for Property Lease Management, follow these steps. These values can be changed at the time a lease or invoice is created.

  1. On the Lease FastTab, do the following: 
    1. Specify the Area Unit for measuring the area of the properties.
    2. Select to use the following options for newly created leases: Consolidate, Align To Month, and Period By Period Lease.
    3. Select the lease charge Frequency.
  2. On the Lease Type FastTab, set the default options for the PLM Invoice Creator page: Lease Type.
  3. On the Default Journal Names FastTab, specify the default journal names when invoice journals are created.
  4. If using a lease accounting standard (e.g., ASC 842/IFRS 16), complete the options on the Lease Accounting Standard FastTab.
  5. If needed, complete the options on the CAM Reconciliation and , Sales-Based Reconciliation FastTabs.
  6. On the No. Series FastTab, select the number series to use for automatic numbering.

Lease

Use this FastTab to set the default values for the other setup pages or for the PLM Lease page.

Fields

This page contains the following fields: 

Lease Fields
Field Description
Area Unit

Select the unit of measure for the area of a leasable category: None, Square Feet, or Square Meters.

The unit of measure for the area can be changed when defining the details for a category on the PLM Categories Setup page, but it cannot be changed when creating a lease for the category.

Consolidate

Select whether invoices for multiple leases are combined into a single invoice.

  • On: Creates a single invoice that combines the billing details for a customer or vendor. Invoices from a single lease can be consolidated when the separate invoices have the same customer or vendor and the same currency. This feature is available for sales order, free text invoice journal, and vendor invoices.
  • Off: Separate invoices are always created.
Prorate Partial Periods

Select whether to prorate the partial billing periods: 

  • On: Calculates partial amounts for first or last periods that are not full billing periods. The amounts for partial billing periods is a fraction of the full billing period amount.
  • Off: Does not calculate partial amounts when the first or last periods are not full billing periods. Partial billing periods are charged the same amount as full billing periods.
Align To Month

Select whether to align the billing period for a lease to the end of a month when the lease is created:

  • On: Aligns the billing period of a lease to the end of a month.

    • For example, a lease is created on April 15, the end of the first billing cycle is April 30. Each subsequent billing cycle then starts on the 1st of the month and ends on the last day of the month.

  • Off: Does not align the billing period for a lease to the end of a month.

    • For example, this option is selected and the billing frequency is monthly. For a billing cycle that starts on April 15, the end of the billing cycle is May 14. Each subsequent billing cycle starts on the 15th of the month and ends on the 14th of the month.
Period By Period Lease

Indicates whether the period-by-period functionality is used (for example, the invoices for a lease are month to month):

  • On: The period-by-period functionality is used. Invoices are created on a period-by-period basis, and lines are added based on the billing frequency of the lease.
  • Off: The period-by-period functionality is not used.
Validate Occupancy

Validates whether the lowest level is already occupied. The option selected is the default value for the PLM Categories Setup page.

  • On: A validation that checks whether the lowest level is occupied based on the lease start date and end date is performed. ClosedMore.
  • Off: No validation checking whether the lowest level is occupied is performed.

When the lowest level is occupied, it can be used by only one lease and cannot be selected for use with another lease of the same lease type. However, the lowest level can be used by a revenue lease and an expense lease at the same time. Consider the examples: 

  • The lowest level is used by a revenue lease (Lease-001) from January 01, 2020, to December 31, 2020. The same lowest level can also be used by an expense lease (Lease-002) from February 01, 2020, to October 31, 2020.
  • The lowest level is used by an expense lease (Lease-003) from January 01, 2020, to December 31, 2020. The same lowest level cannot be used by a different expense lease (Lease-004) during any time from January 01, 2020, to December 31, 2020.
Frequency

Select a default billing frequency for lease charges. The options are: Monthly, Weekly, Bi-weekly, Quarterly, Annually, and One Time.
Number of Periods Specify the default number of periods when a lease is created.

Lease Type

Use this FastTab to set the default values for creating invoice from the PLM Invoice Creator.

Fields

This page contains the following fields: 

Lease Type Fields
Field Description
Lease Type Select the default lease type when creating invoices on the PLM Invoice Creator: Revenue or Expense.

Default Journal Names

Select the default journal and batch names when invoice journals are created from the PLM Invoice Creator.

Note: It is recommended that a dedicated batch for PLM be used.

Lease Accounting Standard

Options for the lease account standard (e.g., ASC 842/IFRS 16).

Fields

This page contains the following fields: 

Lease Accounting Standard Fields
Field Description
Expense lease  
Lease Accounting Standard

Select the lease accounting standard that your organization uses: 

  • ASC 842: The organization uses the ASC 842 accounting standard for expense and revenue leases. All page and field labels that require the lease accounting standard use the ASC 842 label.
  • IFRS 16: The organization uses the IFRS 16 accounting standard for expense and revenue leases. All page and field labels that require the lease accounting standard use the IFRS 16 label.
Revenue/Expense Classification

For expense leases, select the classification for the lease.

  • Financial Lease: The lease is a financial (or capital) lease.
  • Operating Lease:  The lease is an operating lease.
  • Short Term Lease: The lease is for a period of 12 months or shorter.
  • Non-Lease: The lease is similar to a Short-Term Lease where it is for a period of 12 months or shorter, but is only available for the PLM Non-Lease Summary Report (and no other type of reports).

For revenue leases, select the classification for the lease.

  • Sales type lease
  • Direct financing lease
  • Operating lease
  • Exempt lease: Select the exempt type for the charge where the recognition exemption is applied. For example, if you have a low value asset or short-term lease or non-lease components.
Use ROU Accumulative Amortization Account

Only available for expense leases.

Select whether then ROU asset accumulative amortization account is used. For operating leases, this account is optional. For financial leases, this account is mandatory.

  • On: The ROU asset accumulated amortization account is used for financial and operating leases.

    • For the ASC 842 accounting standard, when this option is used and at lease one expense lease has been created, the option cannot be changed. For the IFRS 16 accounting standard, this option is always automatically used.

  • Off: The ROU asset accumulated amortization account is not used for operating leases. However, it is always used for financial leases.
Adoption Date

Specify the date on which the lease accounting standard regulations begin.

Report Date

Specify the reporting start date for the lease accounting standard regulations. The default date is the adoption date.

This date is used so that transactions created after the Adoption Date of the lease accounting standard can be recorded in parallel to the existing transactions. Also, this date is used for running comparison reports. This date must be the same or earlier than the Adoption Date.

If Adoption Date does not have a value, the reporting start date cannot be entered.

Discount Rate

Only available for expense leases.

Specify the rate used to calculate values for the lease, such as lease liability, row assets, and the lease expense in the amortization schedule.

Required when Start date has a value.

Short-Term Lease Liability Method

Select how to reclassify the short-term portion of lease liability. There are three options for classifying short-term lease liability:

  • None: Lease liability is not classified into short term and long term portions.

  • Rolling Periods: Reclassification happens with every billing period.

  • Year End: Reclassification happens once a year, at the end of the fiscal year.
Create General Journal

Only available for Expense leases.

Non-lease Component Charges in Short-Term and Non-Lease Expense Lease types now support the Create General Journal option when enabled at the lease header.

Select the default option for whether general journal entries are created for leases. This can still be changed on a per-lease basis in the PLM Lease Header section.

  • On: Creates a general journal entries for the lease accounting standard calculations. For this option, Property Lease Management is primarily used for calculating the lease accounting standard amounts, and the invoices for the leases are created using a third-party app that is not used within Microsoft Dynamics 365 Business Central.
    The general journal entries are created using the lease payable clearing account for the charges as set up on the PLM Charges page.
  • Off: Creates the invoice journal or vendor invoice within Property Lease Management.

CAM Reconciliation

Common Area Maintenance (CAM) expenses are operating expenses associated with common areas of a building. Use this tab to set up options for CAM.

Fields

This page contains the following fields: 

Common Area Maintenance Reconciliation Fields
Field Description
Allow Negative Recoverable Amount

Select whether a negative CAM recoverable amount is allowed after the CAM reconciliation is performed: 

  • On:  Negative CAM recoverable amounts are allowed.
  • Off: Only positive CAM recoverable amounts are allowed.
Partial Year Calculation

Select the calculation method used for calculating the CAM expenses for a partial year: 

  • Average: Uses the daily average for the reconciled period to calculate the CAM expenses.
  • Actual: Uses the actual periods to calculate the CAM expenses.
Reconciliation Year

Select whether the CAM reconciliation amount is calculated based on the fiscal or lease year.

  • Fiscal year: The CAM reconciliation is based on the fiscal year as set up in Microsoft Dynamics 365 Business Central.
  • Lease year: The CAM reconciliation is based on the lease year.

For example, the fiscal year for a company is January to December. A lease has a start date of April 1, 2018. When the CAM reconciliation is based on the fiscal year, the reconciliation is performed on December 31, 2019. When the CAM reconciliation is based on the lease year, the reconciliation is performed on March 31, 2019.

Sales-Based Reconciliation

Sales-based reconciliation includes administration fees that are additional fees added to the proportional recovery of operating costs added during the reconcile contribution process. These fees are a percentage that can be applied to specific General Ledgers upon which the reconciliation is based and set on the lease charge itself.

Note icon. Note: The sales-based reconciliation feature requires its own license in addition to the standard Property Lease Management license. For more information, contact sales@binarystream.com.

The values in this FastTab are the default values for the sales-based charge on the PLM Sales Based Charge Setup. The following field boxes are available: 

Sales Based Reconciliation Fields
Field Description
Allow Negative Recoverable Amount

Select whether negative amounts are allowed after the sales-based reconciliation is performed: 

  • On:  Negative recoverable amounts are allowed.
  • Off: Only positive recoverable amounts are allowed.
Reconciliation Year

Select how start and end dates of the sales reconciliation reporting year is determined: 

  • Based on Fiscal Year: Sales reconciliation reporting is based on the fiscal year of the company, which bases the start and end dates of the calendar year. The fiscal year setup on the Ledger Calendarspage is part of standard Microsoft Dynamics 365 Business Central.
    When selected, specify the Partial Year Calculation.
  • Based on Lease Year: Sales reconciliation reporting is based on the lease year.
  • Tenant Fiscal Year: Sales reconciliation reporting is based on the tenant fiscal year. When selected, specify the Initial Tenant Fiscal Year End Date.
Partial Year Calculation

If the sales reconciliation reporting includes a partial year, select how the partial year is included in the sales reconciliation calculations.

Available when Reconciliation Year is Based on Fiscal Year.

  • Partial Leasing Year: Combines the partial year with a full calendar year for the reconciliation calculations. With this option, the sales and billing amounts are calculated for the full year, and then prorated based on the start date of the partial year.
  • Separate Period: The partial period is treated separately from the first complete year for the reconciliation calculations. With this option, the sales and billing amounts are calculated for the full fiscal year. No proration is used.
Sales Reporting No. Series Select the number series to use for sales-based reporting.

No. Series

Use this FastTab to set up the number series for leases. Number series is a standard feature in Microsoft Dynamics 365 Business Central and must be set up before you can use the number series-entity feature. For more information, see the article Create Number Series . If the number series are not set up, an error message appears when creating a transaction.

When a lease is created on the PLM Lease, the lease number is automatically generated.

Deposits

Use this FastTab to specify the default batches used during the deposit processing. Currently, you can set up the default batches for the following journal types: 

  • Payment
  • Cash receipt
  • General

Expense Allocation

Use this FastTab to set up the default settings for using the expense allocation feature. This feature is used when a vendor must allocate a payment to multiple tenants. The entire invoice amount or portions of the invoice amount are allocated to selected revenue leases.

Expense Allocation Fields
Field Description
Include Taxes from the Allocation Amount

Indicates whether tax amounts are included in the expense allocation amount.

  • On: Tax amounts are included in the expense allocation amounts.
  • Off: Tax amounts are excluded from the expense allocation amount.
Allow Expense Amount to Exceed the Invoice Amount

Indicates whether the sum total of all allocated expense amounts can exceed invoice amount.

  • On: The sum total of all allocated expense amounts can exceed the invoice amount. This option applies when the allocation method used for an expense allocation template is Variable Amount.
  • Off: The sum total of all allocated expense amounts must be less than or equal to the invoice amount.

Actions

This page contains the following actions: 

Actions Fields
Button Description
Meters Opens the PLM Meters Setup page.
Term Codes Opens the PLM Term Codes Setup page.
Categories Opens the PLM Categories Setup page.
Deposits Opens the PLM Deposits Setup page.
Termination Reason Codes Opens the PLM Termination Reason Codes Setup page.
CAM Pools Opens the PLM CAM Pools page.