Creating lease addition and adjustment

Select Leases.

Click Create.

Specify this information:

Company: Select the name of the lease company.
Lease: Specify the name of the lease and the description you want to add.

On the Main tab, specify this information:

Classification: Select whether the lease is classified as Operating, Finance, or None.
Simulated: Select this check box if the lease is simulated.
Simulated leases can be used to run various lease scenarios without any effect on the books.
Type: Select a lease type.
Lease Term: Specify the number of months the property or equipment is leased. This information is used by the classification test as part of the classification criteria.
Date Range: Select the date range to which the lease begins and ends.
Total, Remaining Life: Specify the total life and the remaining life of the leased property that is expressed as periods. This information is used by the classification test as part of the classification criteria.
Ownership: Select this check box to transfer the ownership to the lessee at the end of the lease. If you select this check box, then the lease classification must be Finance.
Specialized Asset: Select this check box if the asset is specialized.
Project: Select the project account information that is associated with the lease.

Exercise Purchase: Select this check box to classify the lease as a financial lease per US GAAP rules. If this field is selected, then a bargain purchase amount must be specified on the Amount tab. The bargain purchase amount is included as a payment at the end of the lease.

In the Land section, specify this information:

Land And Building: Select whether the land and building classification is Land Only, Land And Building Lease, or Neither.
Land Value, Building Value: If you select Land And Building Lease on the Land and Building field, then specify the fair market value of both the land and building.
If you select Land Only, then specify the fair market value of the leased land.

On the Amounts tab, specify this information:

Currency: If the transaction currency is different from the lessor company functional currency, then select a currency. If this field is blank, then the company functional currency is used.
Exchange Rate: Specify the exchange rate between the company functional currency and the lease transaction currency.
Down Payment Amount: Specify the amount that is paid to the lessor at the beginning of a lease. This amount is used to reduce the lease obligation and to secure the contract. No invoice is created by Lease Accounting for this payment. You must manually create a Payables invoice or use an non-lease component in Payment Schedule to generate an interfaced invoice.
Security Deposit Amount: Specify the security deposit amount.
Bargain Purchase Amount: If Exercise Purchase Flag check box is selected, then this amount is paid by the lessee to purchase the asset at the end of the lease.
Residual Guaranteed Amount: Specify the payment amount at the end of the lease. The lease cannot have a bargain purchase amount that is Exercise Purchase and a Guaranteed Residual.
Residual Unguaranteed Amount: Specify the unguaranteed residual value of the asset at the end of the lease.
Investment Tax Credit: Specify the lessor's tax credit amount.
Fair Market Value at Inception: Specify the fair market value of the leased item at the inception of the lease. This information is used by the classification test as part of the classification criteria.
Initial Direct Cost: Specify the initial direct cost. This amount is used for disclosure report and ROU calculation.
Initial Direct Cost Vendor: Select the initial direct cost vendor. The initial direct costs must be paid to the vendor, not to the lessor.
Incentive Amount: Specify the incentive amount. Incentive amounts are calculated similar to free rent. For example, one month free or reducted rent. Incentive amount affects the use of asset value and rent expense amount.

On the Lease Fund tab, specify this information:

Accounting Entity: Specify the accounting entity associated to this transaction.
Fund: Specify the fund details of the accounting entity.
Percent: Specify the contribution percentage for this fund.

Verify the details then click Save.

On the Payment tab, specify this information:

Current Lessor

Select the name of the lessor. If the vendor or lessor has been changed for this lease, then you can view historical lessors for this lease by running Lease Invoices.

Payments Per Year

Specify the number of lease payments per year. This field is used regardless of the specified value on the Main tab or the total number of payments for the lease.

Invoice Prefix

Specify a prefix that is connected to the payment number. This prefix is used to create the invoice number for Payables. The first 16 characters of the Lease field is the default. This field can be overridden.

Payment Timing

Select whether the payments are created at the Beginning of Period or at the End of Period. This value is used for interest calculation for finance leases to determine interest paid on the first payment.

First Payment Date

Select the date of the first lease payment.

Lessee Discount Rate

If you use the FAS 13 test, then specify the lessee's discount rate.

Implicit Interest Rate

Specify the lessor's interest rate.

The Implicit Interest Rate is used to calculate the Lease Obligation, Net PV, Right Of Use, Lease Amortization, and Interest Invoiced on the leases. If this field is not selected, then the Lease Discount Rate is used.

You must specify either the Implicit Interest Rate or Lessee Discount Rate on the lease.

Debt or Expense Account

If the lease is classified as Finance, then specify the account information where the debt obligation is posted.

If the lease is classified as Operating, then specify the account information where the operating expense is posted.

For long term operating leases, you have two options:

Specify a Debt or Expense Account
Add the debt account in the Allocation Code field and set the Allocation Code Type to Debt or Expense.

You cannot do both.

Allocation Code

Select a valid allocation code to attach to the debt or expense account on the lease. Use this code to allocate percentages of an expense to different companies and dimensions.

For long term operating leases, you have two options:

Specify a Debt or Expense Account
Add the debt account in the Allocation Code field and set the Allocation Code Type to Debt or Expense.

You cannot do both.

Allocation Code Type

Select whether the allocation code type is Debt or Expense or Interest.

For long term operating leases, you have two options:

Specify a Debt or Expense Account
Add the debt account in the Allocation Code field and set the Allocation Code Type to Debt or Expense.

You cannot do both.

Deferred Rent Account

Specify the account information for deferred rent.

Accrued Account

Specify the account information for the accrued account.

On the Classification tab, the results of the classification test are displayed:

Ownership: If the ownership of the leased property is transferred to the lessee at the end of the lease, then the value is Yes. The lease classification is Finance. See the Ownership field on the Main tab.
Bargain Purchase Option: If the lease has a bargain purchase option on the Bargain Purchase Amount field, then this field is Yes and the classification is Finance. See the Amounts tab.
Economic Life to Lease Term: If the lease term at inception is greater than or equal to 75 percent of the estimated economic life of the leased property, then this field is Yes. The lease is Finance. The estimated economic life is on the Remaining Life field of the Main tab. This is used regardless of whether the lease is purchased or owned by the lessee at the end of the lease.
If at the start date of the lease, 25 percent or less of the asset's life remains, then this classification criteria is skipped by the classification test. See the Main tab.
Present Value to Market Value: If the value of the minimum lease payment at the beginning of the lease is 90 percent or more of the fair market value at the inception of the lease, then this field is Yes and the lease is Finance. This value is used whether the lease is purchased or owned by the lessee at the end of the lease.
Net Present Value: The minimum lease payments that are used in the Present Value to Market Value calculation. The amount is shown in both Transaction and Base currency.
Lease Obligation: The present value of lease payments. This amount is booked to the debt account that is specified on the Payment tab.
For finance and long-term operating leases, the associated right-of-use asset must have a book value that is equal to this amount.

On the Options tab, specify this information:

Last Date Reviewed: Select the last date of the last review. You must regularly review leases to see if any decisions regarding lease options have changed. Use Infor Process Automation to find a lease with upcoming review date and send notification.
Early Termination Date: Select the end date to determine the length of the lease when evaluating classification criteria. The early termination date is the end date of the lease if the early termination option in a lease is exercised.
Termination Fee: Specify the termination fee. This amount is paid by the lessee to terminate the lease before the end date. If the lessee is expected to exercise the termination option, then the termination fee is included in the payments.
Termination Option: Select an option to terminate before the lease end date.
Termination Non Lease Component: Specify the expense account for the termination fee, if one exists.
Termination Gain Loss Account: Specify the account code block for any gain or loss on early termination.
Reasonably Certain: Select this check box to reduce the original lease term to the early termination date.
Renewal Option: Select this check box to renew the lease.
Reasonably Certain: Select this check box to include the renewal term in the original term of the lease.
Renewal Notification Date: Select the renewal notification date. The date is used by the lessee to notify the lessor that they intend to renew the lease.
Renewal Term: Specify the number of periods to renew the lease.
Acquired Business Combination: Select this check box if the lease has acquired business combination.
Related Party Lease: Select this check box if the lease has an involved related party.

Click Save.

The Non Lease Component and Attachments tabs are now available.