Property Lease Management Parameters

Select the unit of measure for the area of a leasable category or level. For example, sq. ft or square yards.

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

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

• Yes: 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.
• No: Separate invoices are always created.

Select whether to prorate the partial billing periods: 

• Yes: 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.
• No: 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.

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

• Yes: 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.

• No: 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.

Create termination codes that are used when terminating a lease or lease charge.

To add a termination reason code, follow these steps: 

1. Select New.
2. Specify a unique Reason code and a Reason description.
3. Repeat these steps to add more termination reason codes.
4. Select Save.

Use Billing cycle to set up alternative billing cycles when invoicing leases or charges.

• Yes: You can create billing classes with different billing settings, such as frequency of billing, for example.
• No: Leases do not use any billing cycles and there is no projected invoice date.

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

• Yes: 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.
• No: The period-by-period functionality is not used.

Validates whether the lowest level is already occupied.

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

Select a default billing frequency for lease charges. The options are: Monthly, Weekly, Bi-weekly, Quarterly, Annually, and One Time.

Select whether late fees apply to your leases: 

• Yes: Late fees are applied to leases.
• No: Late fees are not applied to leases.

Can be applied to both Late fees and Fees on Invoice Outstanding Balance.

Select to use the posting profile from the customer profile setup in Accounts receivable.

• Yes: The customer profile from Accounts receivable is used when you create a new sales reporting record.
• No: Select the posting profile from the drop-down under Posting profile.

When you set up a posting profile, you can set up your fee amount by creating an Interest code. For more information on setting up a fee amount and interest code, see Late Fee Amounts.

For more information on setting up customer profiles, see Customer posting profiles on the Microsoft Dynamics 365 for Finance and Operations documentation.

Can be applied to both Late fees and Fees on Invoice Outstanding Balance.

Select the posting profile to use when you create new sales reporting records. This option is not available if you use the default customer profile.

Can be applied to both Late fees and Fees on Invoice Outstanding Balance.

Select to include the taxes of the lease invoice in the fee calculation.

• Yes: Taxes are included in the late fee calculation.
• No: Taxes are not included in the late fee calculation.

Only applies to Fees on Invoice Outstanding Balance.

Select the default lease type when creating invoices on the Invoice Creator: Revenue or Expense.

Select the default invoice type for the Invoice Creator. The invoice type available are based on the selected lease type.

For a revenue lease:

• Free text: This invoice type is not attached to a sales order. This invoice type is available for charges that do not have an item.
• Sales order: This invoice type is used for charges that require an item. When this option is selected, all revenue charges require an item at the time the charge is created or at the time the charge is attached to a revenue lease.

For a expense lease:  

• Invoice journal: Invoice journals are to be created. These invoice types are similar to free text invoices and is available for charges that do not have an item.
• Vendor invoice: Vendor invoices are to be created. These invoice types are similar to sales orders and are used for charges that require an item. When this option is selected, all expense charges require an item at the time the charge is created or at the time the charge is attached to a expense lease.

After a revenue or expense lease is created, this option cannot be edited on this setup or on the Invoice Creator.

Select the default posting option for the Invoice Creator:

• 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.

After a revenue or expense lease is created, this option cannot be edited on this setup or on the Invoice Creator.

Select if users wants to rebill billing lines which have Credit applied against the original Sales order or Free text.

• Yes: Allows users to rebill billing lines which have credits applied against the original Sales order or Free text.

• No: Does not allow users to rebill billing lines which have credits applied against them.

Specify the default payables journal names when invoice journals are created. Set the default names for the following invoice journals: 

• Invoice journal - This journal is used in the Invoice creator window when creating invoice journals for Expense leases.
• General journal - This journal is used during the initial journal processing and remeasurement processes for leases that use ASC842 & IFRS16 charges.
• Customer payment journal - This journal is used when processing deposits for Revenue leases.
• Vendor payment journal - This journal is used when processing deposits for Expense leases.

When creating an invoice on the Invoice Creator, this value is required.

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.

Select your notification preferences for when a change has been made to an expense or revenue lease and must be recalculated:

• Yes: A popup will appear prompting the user to run a new journal to recalculate the lease whenever a change is made to the lease.
• No: A popup will not appear even when a change occurs. However, a small notification bar will appear at the top of the page.

Note: An initial journal must be created for the popup to be activated.

Select whether the data entity will automatically run the remeasurement process for the lease charge (as necessary) and have a modification journal created.

• Yes: When an update to the Lease or Lease Charge is made through data entities, the data entity will automatically run the remeasurement process for the Lease Charge, if needed, and a modification journal will be created.
• No: A remeasurement process will not be triggered when an update to the Lease or Lease Charge is made through data entities.

Select the classification for the expense 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. Available for IFRS 16 only.
• 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).

Select the classification for the revenue 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.

Select whether then ROU asset accumulative amortization account is used.

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

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

• No: The ROU asset accumulated amortization account is not used for operating expense leases and for financial leases that use the ASC 842 accounting standard. For financial leases that use the IFRS 16 accounting standard, this account is always used.

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

Specify the reporting start date for the lease accounting standard regulations. This date is used so that transactions created after the Start 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 earlier than the Start date.

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

Specify the rate used to calculate the present value of future lease payments.

Required when Start date has a value.

Select whether the general journal is created for leases that follow the lease accounting standards:

• Yes: Creates a general journal 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 different program.
  The general journal is created using the lease payable clearing account for the charge as set up on the Charges page.
• No: Creates the invoice journal or vendor invoice within Property Lease Management.

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

• Yes:  Negative CAM recoverable amounts are allowed.
• No: Only positive CAM recoverable amounts are allowed.

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.

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 for Finance and Operations.
• 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.

Select whether a negative amount is allowed after the sales based reconciliation is performed: 

• Yes:  Negative recoverable amounts are allowed.
• No: Only positive recoverable amounts are allowed.

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.

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 Calendars page is part of standard Microsoft Dynamics 365 for Finance and Operations.
  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, the first and last day of the fiscal year are manually specified.

Select whether late fees apply to your leases: 

• Yes: Late fees are applied to leases.
• No: Late fees are not applied to leases.

Select to use the posting profile from the customer profile setup in Accounts receivable.

• Yes: The customer profile from Accounts receivable is used when you create a new sales reporting record.
• No: Select the posting profile from the drop-down under Posting profile.

When you set up a posting profile, you can set up your fee amount by creating an Interest code. For more information on setting up a fee amount and interest code, see Late Fee Amounts.

For more information on setting up customer profiles, see Customer posting profiles on the Microsoft Dynamics 365 for Finance and Operations documentation.

Select the posting profile to use when you create new sales reporting records. This option is not available if you use the default customer profile.

Select the termination reason code.

Select the termination type: 

• 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.
• 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 bills all periods prior to termination date.

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 lease or charge is terminated.
• 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.

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.

Select to use workflows to update the status of your leases. To turn on Enable lease status workflow, you must have workflows already created and active.

• Yes: Allows the status of leases to be updated through workflows.
• No: Workflows are not used to update the status of leases.

Select the lease status you want to use as the default initial status for your leases. If Enable lease status workflow is turned on, then Initial lease status by default is a read-only field and automatically set to Draft.

• Active: New leases are set up as active.
• Draft: New leases are set up as drafts. When a lease has Draft status you cannot invoice the lease.