Charge Termination

Modules > Property lease management > All leases > Lease > Lease charges > Termination > Terminate charge

Use this page to terminate leases at the charge level. After the lease charges are terminated, the following occurs:

• The lowest level end dates are updated with the termination date.
• If all charges for the leases have been fully processed (e.g., billed), the statues of all lines for the leases and all leases are updated to Terminated.
  If charges for the leases still need to be processed, the statuses for those charges is updated to last billing, and the lease statuses remain active until the last charges are fully processed.
• All billing periods that occur after the termination date and for which no invoices have been created are deleted.
• Invoices for the final periods up to and including the termination date are created.
  • When the termination date is the end of the month, the full amount for the period is on the invoices.
  • When the termination date is the first of the month, the invoices are prorated to a 1-day period.
• When proration is used, all escalation and abatement lines use the same proration fraction amount.
• Any units or meters that were attached to a lease become available for use with a different lease.
• For expense and revenue leases that use the lease accounting standard (e.g., ASC 842/IFRS 16), the amortization schedule is updated with the termination.
  • The amortization schedule amounts are prorated based on the termination date.
    Tip: To avoid prorating the last period, terminate the lease using the end date of a billing period.
  • All periods lines after the termination date are set to zero.
  • A line is added to the audit list for the termination.

Terminate Charges

To terminate a charge on your lease, follow these steps:

1. Under All leases, select the lease you would like to modify.
2. Under Charges, select the charge you would like to terminate.
3. Select Termination > Terminate charge.
4. Specify the Termination date and select a Reason code.
5. Select the termination type: 
   1. Default: Terminates the lease at the termination date specified. When selected, Issue credit and Prorate daily are turned off. Both options become read-only and cannot be changed.
   2. Adjust schedule: The termination process will adjust the charge amount similar to the Default option. You can choose to apply credit towards billed periods. When selected, Issue credit and Prorate daily are turned on. Both options can be adjusted
   3. Bill remaining: The termination process bills all periods prior to termination date.
6. Select the posting option:
   1. Create: Creates the invoice or journal entry transactions. When the invoices are created, invoice or journal numbers are automatically generated. When you manually post the transactions, be sure to change the automatically generated invoice or journal numbers.
   2. Create and show form: Creates the invoices and then opens the page where you can review and edit the invoices before posting them. This option can be used when creating sales order invoices from leases where items are required. The sales order invoice numbers are automatically generated based on the setup.
   3. Post invoice automatically: Creates the invoices and automatically posts the invoices using the default options. This option can be used when creating a sales order or free text invoices from leases. The sales order or free text invoice numbers are automatically generated based on the setup.
7. Turn on Invoice remaining amount to have invoices for the terminated lease charges automatically created. These invoices can be manually created or automatically posted, depending on Posting option you select.

Note: If you have selected Bill remaining as the termination type, Invoice remaining amount will be automatically turned on.

8. Turn on Apply termination charge if you want to apply a termination charge.
   1. If Apply termination charge is turned on, select the Charge number and set the termination charge amount under Amount.
9. Turn on Issue credit if you want to create a credit note when a charge is terminated. If Issue credit is turned on, select how the credit is applied: 
   1. Credit adjustment: Creates a credit adjustment for a charge in the lease when a line is terminated. The credit adjustment appears in a future billing period for the lease and automatically adjusts the invoice amount for the next billing period until the credit is finished being applied to the lease.
   2. Issue credit: Creates a credit note when a lease or charge is terminated.
   3. No credit: No credit adjustment or note is created upon termination of a lease or charge. Available only when terminating a lease using the No adjustment option.
10. If Issue credit is turned on, turn on Prorate daily to use the number of days for the proration calculation.
11. Select OK.

If needed, you can create the invoices for any remaining lines that have not been charged.

After terminating leases that use the CAM expense pools, ensure that you use the CAM Reconciliation Process to finalize the recoverable amount.

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Fields

This page contains the following fields: 

Field	Description
Lease type	Select the type of lease you want to terminate: Revenue or Expense.
Termination
Termination date	Select the date on which the lease is terminated.
Reason code	Select the termination reason code.
Description	Displays the reason code description . Read-only.
Termination type	Select the termination type:  Default: Terminates the charge at the termination date specified. When selected, Issue credit and Prorate daily are turned off. Both options become read-only and cannot be changed. Adjust schedule: The termination process will adjust the termination amount, similar to the Default option. You can choose to apply credit towards billed periods. When selected, Issue credit and Prorate daily are turned on. Both options can be adjusted Bill remaining: The termination process will bill all periods prior to termination date.
Transaction
The invoice options are available and can be edited when one of Invoice remaining amount or Apply termination charge is set to Yes. When leases are terminated, invoices for the remaining amounts are automatically created based on the specified options.
Invoice type	Displays the invoice type for the lease:    For an expense lease select:  Invoice journal or Vendor invoice. When Vendor invoice is selected, all charges that are attached to the expense lease require an item. For a revenue lease select: Free text or Sales order. When Sales order is selected, all charges that are attached to the revenue lease require an item. The invoice type selected is based on the settings of the Property Lease Management Parameters page.
Posting option	Select the posting option for the invoices: Create: Creates the invoice or journal entry transactions. When the invoices are created, invoice or journal numbers are automatically generated. When you manually post the transactions, be sure to change the automatically generated invoice or journal numbers. Create and show form: Creates the invoices and then opens the page where you can review and edit the invoices before posting them. This option can be used when creating sales order invoices from leases where items are required. The sales order invoice numbers are automatically generated based on the setup. Post invoice automatically: Creates the invoices and automatically posts the invoices using the default options. This option can be used when creating a sales order or free text invoices from leases. The sales order or free text invoice numbers are automatically generated based on the setup.
Invoice remaining amount	Select whether invoices for the remaining amounts for the charges are created after the charges are terminated. Yes: Invoices for the terminated charges are automatically created. These invoices must be manually posted as a separate action. No: Invoices for the remaining amount are not created. You must manually create the final invoices for the charges after they are terminated.
Apply termination charge
Apply termination charge	Select to apply a one-time charge termination fee to the customer. Yes: Applies a one-time terminate fee to the final lease payment. No: No termination fee is applied to the final lease payment.
Charge number	Select the one-time termination charge number. Available when Apply termination charge is set to Yes.
Amount	Specify the one-time termination charge amount. Available when Apply termination charge is set to Yes.
Credit Options
Issue credit	Creates a credit note when a charge is terminated.
Credit option	When Adjust schedule is selected, you can choose how the credit is applied:  Credit adjustment: Creates a credit adjustment for a charge in the lease when a line is terminated. The credit adjustment appears in a future billing period for the terminated charge and can be invoiced in future periods when the credit adjustment line is invoiced. The adjustment creates a credit document instead of a standard invoice document. Issue credit: Creates a credit note when a charge is terminated. No credit: No credit adjustment or note is created upon termination of a charge. Available only when terminating a charge using the No adjustment option.
Prorate daily	Select to use the number of days for the proration calculation.
Invoice date	Specify the invoice date when the credit notes are created.
Invoice Options
Invoice journal name	Select the invoice journal name you want to use. Required for invoice journals. The options are set up on the Property Lease Management Parameters page.
Lines
Lease number	Displays the lease number.
Name	Displays the name for the lease.
Lease type	Displays the lease type.
Cust/Vend account	For a revenue lease, displays the customer number. For an expense lease, displays the vendor number. The label that appears is based on the lease type selected.
Cust/Vend name	Displays the customer or vendor name.
Currency	Displays the currency of the lease.
Rent commencement date	Displays the rent commencement date.
Lease commencement date	Displays the lease commencement date.
Execution date	Displays the date on which the termination occurred.
Credit amount	If you select Adjust schedule and turn on Issue credit, this field will appear on the lines tab.
Warning	Displays warning messages for why a lease termination did not process.

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See also

Lease Details

Mass Termination