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Lease Details

Modules > Subscription Billing > Billing schedules > Active billing schedules > [select a billing schedule] > Billing schedule lines [select a line] > View Billing Detail > ASC 842/IFRS 16

Use this page to specify and update the details for the billing lines of a lease. You can also review the billing lines for the periods.

If a billing schedule has been terminated then the Lease details page will not be available.

Working with Journal Entries

The following section explains how to create an initial journal entry, create a modification journal, and how to reverse an initial journal entry

Create Initial Journal Entry

On the Lease details form, you can adjust fields in the following areas:

General: Displays general costs and details of the billing line. You can enter values in the Asset cost and Asset fair value fields, for example.
Lease accounts: Displays the default accounts that you set up in Lease Defaults. You can change the accounts for the specific billing line.
Lease incentives: Displays lease incentives that apply to the billing line. You can create incentives for your leases by selecting Lease incentives > New.

To create the initial journal entry, do the following:

Make any adjustments to the fields under these tabs:
1. General
2. Lease accounts
3. Lease incentives
After you have entered your lease values, select Process.

The fields on the lease details form are then updated with the values you entered.
Once you have finished your adjustments, select Create initial journal.

It is necessary for all finance leases to create a journal entry so that any generated invoices display the updated lease details. For operating leases, if there is no direct cost then you do not need an initial journal entry to generate invoices.
Select the Initial journal date and then select OK.

After you have created the initial journal entry for your lease you can then generate an invoice. Lease lines only appear as an option to invoice after the initial journal entry is created.

Create a Modification Journal

After you create your initial journal entry, you can modify the same billing line by creating modification journals.

Limitations of Modification Journal

You cannot modify the fields on the Lease details form until after the initial journal entry is created and posted. If an initial journal entry is not posted or an invoice is only partially posted or not posted at all, you are not able to modify any values.
- You might see this message: The invoice has not been posted. Please post the invoice first. if you have not fully posted your journal entry.
After you select Create modification journal > Modification journal process, the journal date displays the date of the next billing period for which an invoice is not posted. The Modification journal date is a read-only field.
If an account number of a balance sheet account is changed, then there will be a journal imbalance and the journals will need to be balanced manually. You will receive the following warning, displayed at the top of the screen: Lease account changes will cause a journal imbalance. Please move pre-existing amounts to balance the journals. This warning will appear after each modification and will apply to all balance sheet accounts.

To create a modification journal, do the following:

Ensure that you have created the initial journal entry.
Make any adjustments to the fields under these tabs:
1. General
2. Lease accounts
3. Lease incentives
After you have entered your lease values, select Process.

The fields on the lease details form are then updated with the values you entered.
Once you have finished your adjustments, select Create modification journal.

It is necessary for all finance leases to create a journal entry so that any generated invoices display the updated lease details. For operating leases, if there is no direct cost then you do not need an initial journal entry to generate invoices.
Select the Modification journal date and then select OK.

After you have created your modification journal, you can see the initial journal entry and your modified journal entry under the Audit tab.

Reverse Initial Journal Entry

You can reverse an initial journal entry and restore the values of the line as they were before the initial journal entry was created. To reverse a journal entry, the initial journal entry must be created and posted. However, you cannot reverse an initial journal entry if any invoice is created or posted.

To reverse the initial journal entry, do the following:

Go to the line for which you want to reverse the initial journal entry. Go to Subscription Billing > Billing schedules > Active billing schedules > [select a billing schedule] > Billing schedule lines [select a line] > View Billing Detail > ASC 842/IFRS 16
Select Reverse initial journal.
The Reverse initial journal processing page opens.
Select the Reversal journal date and then select OK.

After you have created the reversal journal, the audit and amortization tables are updated.

Working with Asset Returns

This section explains how to create an asset return and then how to reverse an asset return if necessary.

Create Asset Return

To create an asset return, you must have created and invoiced all of the schedule lines. The Create asset return option is available after you have invoiced all the schedule lines. To create an asset return, do the following:

Go to Subscription Billing > Billing schedules > Active billing schedules > [select a billing schedule] > Billing schedule lines [select a line] > View Billing Detail > ASC 842/IFRS 16
Select Create asset return.
The Create asset return processing page opens.
Enter the asset journal date and then select OK.

After you create the asset return, you can then see that line as terminated on the schedule line in the Billing schedule page, in the Termination tab of Line details section of the billing schedule, and in the Termination FastTab. The reason code used in for the asset return is the reason code you select in your ASM parameters.

Reverse Asset Return

To reverse and asset return, do the following:

Go to Subscription Billing > Billing schedules > Active billing schedules > [select a billing schedule] > Billing schedule lines [select a line] > View Billing Detail > ASC 842/IFRS 16
You must have created an asset return.
In the ASC 842/IFRS 16 account standard form, select Reverse asset return.
The Reverse asset return processing page opens.
Enter the asset journal date and then select OK.

After you reverse the asset return, the schedule is active again and you can edit it.

Header Fields

The header contains the following read-only fields:

Lease detail fields
Field	Description
Billing schedule number	Displays the billing schedule number.
Item number	Displays the item number.
Net amount	Displays the net amount for the item for the billing schedule.

Buttons

The header contains the following buttons:

Lease detail buttons
Field	Description
Process	Updates the lines in the lease details form.
Create initial journal	Creates the initial journal.
Create modification journal	Creates the modification journal. Only visible after the initial journal entry is created.
Create asset return	Creates a journal and audit line. Only available once all periods have been fully posted. Only visible for finance leases.
Reverse initial journal	Reverses the initial journal entry and creates a reversal journal number where you can view details about the journal entry that was reversed. Only visible if an initial journal entry is created, but an invoice is not yet created or posted.
Reverse asset return	Reverses an asset return modification and opens a processing window where you can specify details about the reversal of the asset return. Creates a reverse asset return journal entry, the charge is changed to Active, and the audit table is updated.

General (FastTab)

The following section describes the available fields under the General tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

The Classification drop-down is available under the General tab. The Classification menu is only enabled for modifications after the initial journal entry has been posted. Use it to select the type of lease:

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

General (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Asset cost: Displays the value from the net investment of the last invoice after the journal is created and invoiced. Modified asset cost: Displays the original asset cost that was modified. Asset fair value Residual value Direct cost: Displays the value from the Operating Unamortized direct cost balance of the last invoice after the journal is created and invoiced. Modified direct cost: Displays the original direct cost that was modified. Direct cost at modification: Enter direct costs incurred at modification.
Available fields for Sales type lease	Guaranteed residual value Unguaranteed residual value Implicit rate
Available fields for Direct financing lease	Guaranteed residual value Unguaranteed residual value Implicit rate Implicit carrying rate value
Available fields for Operating lease	Calculate straight line: If switched on, then straight line income is calculated. Straight line income Direct cost
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Asset cost Modified asset cost Asset fair value Residual value Direct cost Modified direct cost Direct cost at modification
Available fields for Sales type lease	Guaranteed residual value Unguaranteed residual value Implicit rate Substantial/Not substantial Yes: Recalculates the implicit rate after you select Process. No: Uses the old implicit rate and does not calculate a new implicit rate.
Available fields for Direct financing lease	Guaranteed residual value Unguaranteed residual value Implicit rate Substantial/Not substantial Yes: Recalculates the implicit rate after you select Process. No: Uses the old implicit rate and does not calculate a new implicit rate.
Available fields for Operating lease	Calculate straight line: If switched on, then straight line income is calculated. Straight line income Direct cost expense

Lease accounts (tab)

The following section displays the lease accounts that you have set in the ASM Parameters form as well as lease accounts set on Lease tab of the billing schedule line. Under this tab, you can change the accounts connected to the billing line without having to go back to the billing schedule window.

If you have enabled deferrals in the ASM Parameters form, then deferral accounts are also visible.

Lease accounts
Accounting standard	Accounts
Lease accounts for ASC 842	For a Sales type lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income account Direct cost expense account Direct cost clearing account Revenue account Cost of sale account Rounding account Asset reclass clearing account Impairment loss account Interest income deferred account - visible if deferrals are enabled For a Direct financing lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income account Direct cost expense account Direct cost clearing account Rounding account Asset reclass clearing account Impairment loss account Deferred profit account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled For an Operating type lease, the following accounts are visible: Direct cost expense account Direct cost clearing account Unamortized direct cost account Revenue account Rounding account Loss on termination account Tenant incentive account Deferred lease receivable account - visible if deferrals are enabled Lease income deferred account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled
Lease accounts for IFRS 16	For a Sales type lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income - lease receivable account Interest income - unguaranteed residual value account Direct cost expense account Direct cost clearing account Revenue account Cost of sale account Rounding account Asset reclass clearing account Impairment loss account Gain on modification account Loss on modification account Unearned income - unguaranteed residual value account Interest income deferred account - visible if deferrals are enabled For a Direct financing lease, the following accounts are visible: Lease receivable account Unguaranteed residual value account Asset clearing account Interest income - lease receivable account Interest income - unguaranteed residual value account Direct cost clearing account Unearned income - unguaranteed residual value account Rounding account Gain on modification account Loss on modification account Asset reclass clearing account Impairment loss account Interest income deferred account - visible if deferrals are enabled Unearned income deferred – lease receivable account - visible if deferrals are enabled Unearned income deferred – unguaranteed residual value - visible if deferrals are enabled For an Operating type lease, the following accounts are visible: Revenue account Direct cost expense account Direct cost clearing account Unamortized direct cost account Revenue account Rounding account Loss on termination account Tenant incentive account Deferred lease receivable account - visible if deferrals are enabled Lease income deferred account - visible if deferrals are enabled Direct cost expense deferred account - visible if deferrals are enabled

Termination (FastTab)

This section describes the available fields under the Termination FastTab. When you use early termination of a line in the Termination FastTab, you set up a termination fee and the date when the charge is terminated. To actually terminate the line, you have to follow the steps in Terminate Schedule Lines. If you set up early termination with a termination fee and process that change in the Lease details window, then that fee will appear in the Billing details inquiry. A termination line will also appear in the Billing details inquiry if you terminate a schedule line.

You cannot reverse a terminated billing schedule if credit was issued. When you are terminating a billing schedule line while using one of the two lease accounting standards, you can only use the Adjust schedule or No adjustment types of termination. You cannot use the Bill remaining or Default types of termination.

Early Termination of a Billing Schedule Line

To charge an early termination fee, you must have created and posted an initial journal entry and posted any prior invoices. To set up early termination of a charge, follow these steps:

Under Billing schedules, select the schedule you want to modify.
Under Billing schedule lines, select the line you want to modify and then open View billing detail.
Select the lease accounting standard button to open the Lease details form.
In the Lease details page, make any adjustments to the line, and then select Process.
Go to the Termination FastTab, and turn on Early termination.
Enter a termination fee if necessary.
If you enter a termination fee, enter a date when the termination fee is charged in Termination fee payable date.
Enter an impairment loss or asset revalue amount if you are using a Sales type or Direct financing lease. You must enter a value for at least one of Impairment loss or Asset revalue.

After you set up your early termination options, select anywhere in the page to refresh the amortization schedule. A line is added to the amortization schedule and to the billing lines section which shows when in the billing period the schedule line is terminated. After charging an early termination fee, you can still invoice the lines after the Termination fee payable date.

Terminate a Billing Schedule Line

Before you can terminate a billing schedule line, make sure that the initial journal entry is created and posted.

Note icon. Note: Any asset return or initial journal entry is automatically reversed when you terminate a billing schedule line.

Under Billing schedules, select the schedule you want to modify.
Under Billing schedule lines, select the line you want to terminate and then open View billing detail.
Select the lease accounting standard button to open the Lease details form.
Under the Termination FastTab, and if you are using a Sales type or Direct financing lease, enter asset revalue and impairment loss values. One of Impairment loss or Asset revalue must have a value.
1. If you are using an Operating lease, enter a value in the Loss on termination account.
Select OK to close the Billing lines page.
Under Billing lines, select the line you want to terminate.
Select the Termination date, the Termination type, and the Reason code.
Set Credit option to Issue credit.
If needed specify any Termination notes.
Select Terminate.

After you have terminated the billing schedule line, go back to the billing details of the terminated charge. Open the Lease details page and you can see the amortization schedule is updated to show the schedule line is terminated. You can also view the terminated journal by opening it under Audit > Journal number.

Issuing Credit when Terminating Billing Schedule Line

When you are terminating a billing schedule line and issuing a credit with the termination, you must select a termination date at the end of whichever billing period you choose. You cannot issue a partial credit when you terminate a billing schedule line.

To issue credit for the termination of a billing schedule line, do the following:

Follow steps one through seven from the Terminate a Billing Schedule Line process. The termination date must be at end of a specific billing period.
When you are in the Terminate schedule lines window, select Adjust schedule as the termination type.
Select the type of credit option you want to use.
Enter the invoice date.
Select OK to close the Terminate charge page
After you have processed the termination, go to Charge details FastTab of the lease > Termination.
Under Charge details > Termination, on the audit table, open the invoice. Then, in the invoice journal, on the Action tab, select Voucher.
You can see the credit amounts of the termination.

Reverse Termination of a Billing Schedule Line

Before you reverse a termination, make sure that the termination initial journal entry is created and posted.

Under Billing schedules, select the schedule you want to modify.
Under Billing schedule lines, select the line you want to modify and then open View billing detail.
Select the lease accounting standard button to open the Lease details form.
Select Termination > Reverse termination. The Reverse termination page opens.
Review the details of the billing schedule line termination to make sure you want to reverse the termination. Make sure that Allow reverse termination is selected. If it is not selected, the termination cannot be reversed.
Select Reverse termination.
The Removal date is updated with the current date.
Close the page.

After you have reversed the termination of the billing schedule line, go back to the billing details. Open the Lease details page and you can see the amortization schedule is updated to show the billing schedule line is active again. You can also view the reverse termination journal by opening it under Audit > Reversal journal number.

Fields

The following field boxes are available:

Termination options FastTab fields
Field	Description
Early termination	Turn on to allow for early termination of a billing schedule line. Use this option if you know that a billing schedule will be canceled on a certain date and want to charge a termination fee. Yes: Early termination of the billing schedule line is available. No: Early termination is not used.
Termination fee	Enter an amount to charge as a termination fee. Optional.
Termination fee payable date	Enter the date when the termination fee is payable. Required if the termination fee is greater than zero.
Impairment loss	Enter an amount to specify the remaining value of the billing schedule line after it is terminated. Required for Sales type and Direct financing billing schedules. One of Impairment loss or Asset revalue field must have a value.
Asset revalue	Enter an amount which specifies the value of the asset after the billing schedule line is terminated. Required if Impairment loss field is empty.

Lease incentives (FastTab)

The following section describes the available fields under the Lease incentives tab for all three types of leases under the ASC 842 and IFRS 16 accounting standards.

Fields

The following field boxes are available:

Lease incentives fields
Field	Description
Type	Select the type of incentive. Tenant incentive is the only available type of incentive.
Option	Select the payment option for the incentive. Lump sum: A one time payment. Recurring: A recurring payment schedule. You must select an end date for this payment option.
Start date	Select the start date of the incentive.
End date	If you are using a recurring payment option, select an end date of the incentive.
Amount	Select the amount of the incentive.

Buttons

The following field boxes are available:

Lease incentives buttons
Button	Description
New	Create a new line under Lease incentives.
Remove	Remove a selected line.

Totals (FastTab)

The following section describes the fields under the Totals tab for Sales type leases and Direct financing leases under the ASC 842 and IFRS 16 accounting standards. The fields are view only.

Totals (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for both: Sales type lease Direct financing lease	Implicit rate Net present value Present value of guaranteed residual value Present value of unguaranteed residual value Lease receivables Net investment Revenue: Sales type lease only Cost of sale: Sales type lease only Gross profit/loss: Sales type lease only Implicit rate carrying value: Direct financing lease only Asset cost: Direct financing lease only Deferred profit: Direct financing lease only
IFRS 16 Fields
Available fields for both: Sales type lease Direct financing lease	Implicit rate Net present value Present value of guaranteed residual value Present value of unguaranteed residual value Lease receivables Net investment Unearned income - unguaranteed residual value Unearned income - lease receivable account Revenue: Sales type lease only Cost of sale: Sales type lease only Gross profit/loss: Sales type lease only Asset cost: Direct financing lease only

Amortization schedule (FastTab)

The following section describes the available columns under the Amortization schedule tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

Amortization schedule (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Period Start/End date Amount
Available fields for Sales type lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest or investment Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Direct financing lease	Present value Interest on lease receivable Interest on unguaranteed residual value Earned profit Interest on investment Net investment balance Lease receivable balance Unguaranteed residual value balance Deferred profit
Available fields for Operating lease	Straight line income Deferred rent receivable Deferred rent receivable balance Direct cost expense Unamortized initial direct costs
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Period Start/End date Amount
Available fields for Sales type lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest on investment Unearned income - unguaranteed residual value Unearned income - lease receivable account Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Direct financing lease	Present value Interest on lease receivable Interest on unguaranteed residual value Interest on investment Unearned income - unguaranteed residual value Unearned income - lease receivable account Net investment balance Lease receivable balance Unguaranteed residual value balance
Available fields for Operating lease	Straight line income Deferred rent receivable Deferred rent receivable balance Direct cost expense Unamortized initial direct costs

Audit (FastTab)

The following section describes the available columns under the Audit tab for three types of leases under the ASC 842 and IFRS 16 accounting standards.

After the modification journal is created, a new field called Amortization reference number is visible in the Audit tab.

The Amortization reference number contains a hyperlink. Select it to open the Amortization history window which displays an amortization grid and all of the rates of the corresponding row. The Amortization history displays the original totals as well as the original amortization grid data.

Note icon. Note: The Amortization history window does not display the Lease incentives tab.

Every time that a modification journal is created this screen displays a new audit line, and a new reference number in its data.

Audit (tab) fields
Lease classification	Fields
ASC 842 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Start date Lease incentives Fair value Journal number Comment Date Amortization reference number: Refers to billing schedule number, line number, and audit line number. Visible after you create a modification journal entry. If you select the Amortization reference number, you can see the amortization history of the modified journal entry. Modification date
Available fields for Sales type lease	Implicit rate Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Net investment Revenue Cost of sale Gross profit/loss Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Direct financing lease	Implicit rate Implicit carrying rate value Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Deferred profit Net investment Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Operating lease	Asset cost Residual value Direct cost Straight line income Direct cost expense
IFRS 16 Fields
Available fields for all three of: Sales type lease Direct financing lease Operating lease	Start date Lease incentives Fair value Journal number Comment Date Amortization reference number Modification date
Available fields for Sales type lease	Implicit rate Market value Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Fair value Net investment Revenue Cost of sale Unearned lease receivable Unearned unguaranteed residual value Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Direct financing lease	Implicit rate Net present value Guaranteed residual value Unguaranteed residual value Lease receivables Fair value Net investment Unearned lease receivable Unearned unguaranteed residual value Initial direct cost Present value of guaranteed residual value Present value of unguaranteed residual value
Available fields for Operating lease	Fair value Asset cost Residual value Direct cost Straight line income Direct cost expense