This chapter covers the following topics:
Contract authoring is the process by which you enter the details of an agreed-upon deal and create an active contract in Oracle Leasing and Finance Management. During authoring, you create an inactive contract first; then complete it by selecting or entering data, and adding financial asset and fee lines to the contract. You complete the process by generating financial information and submitting a request for approval to activate.
To author a new contract, you can create a contract from scratch, copy a lease quote or lease application, start with a contract template, or copy an existing contract. During the initial authoring of an inactive contract, you enter contract details such as customer information, financial product, vendor program, master lease agreement, terms and conditions, asset lines, and service lines. Most items you select must be set up prior to authoring your contract. Some items you enter, such as services or usage, link to contracts or objects in other Oracle Applications. For example, you can link a service line on your contract to an Oracle Service Contract. This enables you to consolidate billings for lease and loan agreements with billings from a service contract.
After you have entered the contract details, you must validate the contract, calculate estimated taxes and generate the financial information such as streams and rates. As you complete each step of the activation sequence, you can review the results. After each step is completed, you submit the contract for approval. Once the approval hierarchy is completed and the contract is approved, Leasing and Finance Management completes activation by creating all required accounting and creating any additional information in other applications automatically.
You can search, update, and duplicate existing contracts from the Contract Search summary page. The Contract Search summary page is available in the following menu locations:
Customers>Contracts
Operations>Contracts
Asset Management>Contracts
If your security profile is enabled for multiple organizations, then you can search for contracts belonging to any organization for which you are authorized. Leasing and Finance Management enables you to personalize the search to query existing contracts using your criteria. See the Personalization Guide to personalize Oracle application pages.
Often contract authoring events such as contract approval may be separated by days or weeks, yet the subsequent steps in the business process must be completed in sequence. Business events are opportunities at each small step in the authoring process where you can configure Oracle Workflow to increase efficiency through automation. Leasing and Finance Management business events make it easy to connect Oracle Workflow to your unique business process. You can automate tasks, notify others when a contract is ready for its next step, or route the contract to the appropriate user for additional processing. The business events are seeded in Oracle Workflow and reside in the background throughout the origination processes. Each seeded event is disabled by default. To use a business event, you must first enable it and then subscribe a workflow to the event. See Seeded Business Events For Lease Contract Authoring, Oracle Lease Management Implementation Guide for a list of the Leasing and Finance Management business events.
If you are originating your transactions in a third party system, Leasing and Finance Management enables you to use an import interface to load contracts for authoring. You can load the contracts in any state, from New to Booked using the associated batch processes. The import interface automatically validates contract information you load to ensure it is complete and accurate. You can use the import interface in conjunction with contract templates to ensure your contracts have the required information. See section for more information about using the contract import feature.
When you create a contract, you first decide the method you want to use to create the contract:
Do you want to create the contract from scratch?
Do you want to use information provided in another source, such as a contract template or vendor program?
If the contract is new, then you must enter the required and relevant information. If it is derived from a source, then you have existing contract information that you can edit to complete the authoring process.
When you create the contract, you enter or select information for the contract, customer, rental period, and other details that are required to support the contract during its life cycle.
You must also choose a financial product for the contract. The financial product provides two important functions to a contract:
The product links a contract to an accounting template set, which specifies all the accounting required for all the transactions associated with the contract.
The product contains classification qualities that define the financial information generated for the contract.
In addition to the standard Oracle Leasing and Finance Management setups specified in the Leasing and Finance Management Implementation Guide, you must set up the following in order to complete contract authoring:
Parties and Customer Accounts, including bill to sites and installed locations
Supplier accounts and pay sites for your vendors
Other parties you want to use as guarantors, brokers
Counters used in conjunction with contract usage lines
Vendor Program Agreements
Master Lease Agreements
Insurance providers and products
Credit Lines
From the Contracts search and summary page, perform the following steps to create the basic contract with status as New:
Select Contract from the drop down menu and click Create.
The Create Contract page appears.
Note: You can create a contract template by selecting the applicable option.
Select an operating unit to create a contract within the applicable operating unit.
Note: The list of values includes operating units assigned to the MO: Security profile.
Note: The application displays the selected operating unit as the default in the subsequent pages irrespective of the value that you set for the MO: Default Operating Unit profile option.
The selected operating unit restricts the valid list of values in applicable fields.
The application displays the legal entity associated with the selected operating unit.
Note: The legal entity identifies the first party on the agreement.
Enter an alphanumeric unique contract number for the contract. Alternatively, if you have set up auto-numbering, then an automatically generated number populates the field.
In the Customer Name field, select the customer party for the lease contract
Enter the date from when the contract is effective.
Select the vendor program agreement number to associate the contract with a vendor program.
Select the source for the contract. If you choose any of the options other than New, then click the flashlight icon to search for the source that you want to copy.
Note: While copying, the application automatically generates the new asset numbers and copies the serial numbers.
Click Apply to save and update later. Otherwise, click Continue to save and add contract details.
The Contract Details page includes display-only fields that you cannot update, such as status, operating unit, lessor legal address and version number that you cannot update. If this information is incorrect, then you must cancel the contract and start over. Other information defaults from your selections, such as book classification and tax owner from the financial product and customer address from the customer account.
After you complete and save the first page of the contract, use the Contract Details page with sub-tabs for different sections of the contract to enter the remaining contract information to complete contract authoring.
General Contract Details
Using the General subtab on the Contracts page, complete the following:
Enter a contract description.
Select the master lease agreement number, if you are using a master lease agreement.
Note: Only master lease agreements that are active on the effective date of the contract are available for you to select. You may select master lease agreements that belong to other customers.
Select the Re-leased Asset check box if you want to select assets from your current off-lease inventory. If you select this option, then you cannot create new assets on the contract.
Lessor
In the Lessor section, select the legal entity to identify the first party on the contract.
Select the sales representative for the lessor who receives credit for originating the contract.
Note: The application displays the operating unit that you selected while creating the contract and the ledger associated with the legal entity.
Customer
In the Customer section, enter the Customer Name if you did not select a customer on the create page. You may also change the customer name.
In the Customer Account field, select the customer's Oracle Receivables account number.
Enter the customer's purchase order number.
In the Acceptance Method field, select the method that your customer uses to accept the financed equipment.
Select the credit line for the contract.
Note: The credit line must have the same currency and customer as the contract. During funding, the credit line tracks the customer's credit limit. You must set up credit lines in advance.
Note: The application displays the legal address specified in the party record.
Rental Period
In the Rental Period section, in the Term field, enter a numeric value, in terms of whole months, for the length of the contract term.
Enter the date when the equipment was delivered at the customer's designated site.
In the Acceptance Date field, enter the date the customer accepted the equipment.
Enter the date on which the contract was signed. The date cannot occur before the contract Effective From (start) Date.
Enter the Effective From (start) Date when the contract term begins.
Note: The application derives the period for Effective To date from the start date and contract term.
In the Re-Book Limit Date field, enter the date before which you will not accept any contract revisions.
Financial
In the Financial section, in the mandatory Product field, select the financial product you want to attach to the product.
You create financial products during Oracle Leasing and Finance Management setup, and they contain the accounting options and qualities relevant to that product. For more information on financial products, see the Oracle Leasing and Finance Management Implementation Guide.
Optionally, select a different currency for your contract.
The functional currency for the selected operating unit or the value from the source document (lease sales quote, lease application, existing contract, or contract template) defaults the contract currency. If the currency is not the functional currency of the contract’s operating unit, then you must enter conversion details. Altering the currency defaulted from another source document will impact the other financial details of your contract.
You can change the conversion parameters with no financial impact on your copied contract.
If you selected User for the Currency Conversion Type, then enter the rate in the Currency Conversion Rate field.
If you selected a value other then User for the Currency Conversion Type, then enter the Currency Conversion Date to enable Oracle Leasing and Finance Management to determine the appropriate currency conversion rate for the currency conversion type you selected.
Note: The Book Classification and Tax Owner fields are read-only. These are both derived from the financial product you selected for the contract. To alter either or both of these fields, select a different product, one that has the necessary qualities and quality values. See Define Financial Products, Oracle Leasing and Finance Management Implementation Guide.
Select the Eligible for Pre-Funding check box if you plan to create and approve funding requests prior to booking the contract. You will not be able to create and approve funding requests with the type Pre-Funding if you do not select this option.
If you intend to create and approve Pre-Funding requests, then you must determine whether to charge interim interest. If you do set up interim interest rates for the contract (in the Interest Rate terms and conditions), then you must decide whether to periodically bill for the interest or whether to add up the interim interest and capitalize it upon contract activation. Select the Capitalize Interim Interest check box if the contract is subject to capitalization of any interim interest (the period between funding dates and contract start date.)
Note: If Capitalize Interim Interest is left unchecked, then interim interest is billed to the customer periodically.
Source
In the Source section in the Transfer Date field, you can enter the date the contract was transferred to a new customer, if applicable.
Note: If the contract was Split from another Contract, Replaces a Contract, has an attached Converted/Legacy Number, or was created from an Origination Quote, then that information appears in one of the read-only fields below the Transfer Date field. If the contact was part of the lessor's legacy conversion, the Converted Account check box may be used to identify converted contracts and will automatically include a check mark if populated during your conversion.
Other
Select the check box if a Private Activity Bond secures the contract.
Select the Consumer Credit Act Deal check box if the contract is subject to the US Consumer Credit Act.
Select the Non-Notification check box to contact the vendor instead of the customer in case of delinquency.
If you select the Assignable field check box, then the contract streams are available for addition to an investor pool and Yes appears in the Assignable field after the contracted is booked If you do not select the Assignable field check box, then contract streams cannot be added to an investor pool and No appears in the Assignable field after the contracted is booked.
Third Party Insurance
You can capture information about the third party insurance policies that a customer may have to cover the assets on the contract. You can create only one valid third party lease insurance policy for a contract. You can enter a due date for proof of insurance to insure you follow up when proof of the policy is required. However, if you enter a third party policy and enter a date for Date Proof provided, it prevents you from adding automatic lease insurance to the contract.
Before you can select insurance providers or agents and their contact information and addresses, you must have them set up as suppliers in Oracle Procurement.
See: Define Suppliers, Oracle Lease Management Implementation Guide
To add a third party policy to a contract, click the Create Third Party Insurance button and enter the information for a lessee's third-party insurance policy.
The Create Third Party Insurance page appears.
In the Policy Number field, enter the insurance policy number.
Enter the mandatory Effective From and Effective To dates of the policy.
In the Covered Amount field, enter the amount of coverage the policy provides.
In the Deductible field, enter the amount of any policy deductible.
In the Endorsement Field, enter a description of any endorsements to the policy.
In the Name of Insured field, enter the name of the insured customer.
If the lessor is insured, then select the Lessor Insured check box.
If the lessor is named as a payee on the policy, then select the Lessor Payee check box.
In the Insurance Company field, select the Insurance Company providing the policy.
Select the address of the insurance company from the list of values.
In the Agent/Broker Name field, select the lessee's agent or broker from the list of values
Select the address of the agent or broker from the list of values.
Under the Insurance Proof section, enter the Due Date for proof to be obtained by.
Enter the Provided Date when proof was obtained.
Click Apply.
If the contract has not been booked or submitted for approval, then you can edit the information on the contract by searching for the contract, and clicking the contract number hypertext link, which opens the Contract Details page. From the Contract Details page, click the Update button and make your changes. Click Apply to save your changes.
Tip: You can narrow your search by entering a partial string of the contract number you are searching for and then clicking the flashlight icon. You can further narrow your search by clicking the Advanced Search button and entering more detailed criteria about the contract, such as category, status, or effective from and to dates.
Note: If you have associated a pre-funding request or an advance receipt to the contract before booking it, then you cannot update the legal entity.
When you create a contract, two parties are automatically defaulted on the contract: Lessor (the legal entity) and the Lessee (the customer you selected). If you associated a vendor program agreement to the contract when you created it, the vendor of the program also defaults as a Lease Vendor party.
You can create additional parties and assign them roles, such as Lease Vendor, Guarantor and Label Holder (Private Label). With each of these roles, you must provide some information specific to the role.
Some party roles are predefined for you, but you can add new party roles that you use with your contracts.
A lease vendor is usually the party that sells the lessor the equipment that is going on lease, pays subsidies to you or is paid by you for fees or services. You must associate lease vendors to the contract before you can disburse funds to the vendor or use them on subsidies. Lease Vendors are sourced from suppliers set up in Oracle Payables or using Oracle iSupplier. You can also associate a customer account to a Lease Vendor so you can create invoices when you need to bill a vendor for contract related charges, such as subsidies. The customer account you select can be related to the same party as the supplier account you selected for the Lease Vendor or you may choose an unrelated customer account.
A guarantor is a party that guarantees that payments will be made on behalf of the lessee to meet contractual commitments. You may require a guarantor when a lessee's creditworthiness is not sufficient. A deal can have multiple guarantors. Guarantors are sourced from Oracle TCA customer accounts. You can use Oracle Receivables or other TCA based applications to set up new accounts and use them as Guarantors.
The private label holder is the brand name the lessor uses when acting on behalf of a program vendor. The lessor maintains the investment on the lease, but uses the name and likeness of the label holder when dealing with lessees and other customers. Private label holders are sourced from your supplier accounts.
The Parties subtab displays all the parties already associated with the contract. For a new contract, only the lessor and lessee roles and associated names appear in the table at the bottom of the page.
Use Oracle Contracts to set up additional Party Roles. You can set up new, user-defined party roles that are sourced from the following party repositories:
Oracle Purchase Order Vendors
Oracle Trading Community Architecture (TCA) - customers and other parties
Oracle Human Resource Organizations - internal contacts
The available party names and details are sourced based on the party repository defined for that party role.
You must have authored, or be in the process of authoring, a contract.
You must have set up parties (Label Holder and Vendors in Oracle Payables, Guarantor in Oracle Receivables, and Party Roles in Oracle Contracts).
In the Parties subtab, select the party role in the Add field and click Go. The Add Party page appears displaying fields applicable for the selected role.
Create Role of Guarantor
In the Create Party page, select the guarantor party in the Name field. You can choose any customer account in Oracle Receivables belonging to your organization. The application displays the role that you selected.
Select the type of guarantor.
In the Correspondence Site field, choose the address to which any credit related correspondence is sent to the guarantor. This value is the Party Site number. Some guarantors have multiple addresses to choose from.
In the Guarantee Type field, specify whether the guarantee is for the Full Amount or Partial Amount guarantee. If the guarantee is partial, then enter a numeric value for the amount of the partial guarantee in the Guaranteed Amount field.
In the Guarantee Date field, enter the date you received the guarantee.
Enter brief comments relating to this guarantor.
Click Apply.
Note: If you have a primary and a secondary guarantor, repeat steps 1–7 for each.
Create Role of Lease Vendor
In the Create Party page, select the vendor name. You can choose any vendor from Oracle Payables belonging to your organizational unit.
Click Apply.
When you associate a vendor program agreement to a lease contract, the lease vendor from the vendor program is automatically defaulted as the lease vendor on the lease contract.
For the billing details for a vendor, select the vendor to update, then select the customer account and billing details to be used if the related vendor/supplier has to be issued an invoice. Vendors are sometimes issued invoices for purposes of recourse or repurchase, or for other reasons. However, the vendor is not billed on behalf of the customer for regular lease or loan payment billing based on this set up.
Create Role of Label Holder
In the Create Party page, select the label holder name. You can choose any label holder from Oracle Payables belonging to your organizational unit.
At the Logo URL field, enter the URL of the private label logo site. You can specify the host URL that directs you to the Web site containing a logo of the label holder.
Click Apply.
After you have created a contract and entered all the basic information, you must add the terms and conditions that may apply to the lessor or the lessee during the life of the contract.
Terms and conditions are the financial and legal arrangements agreed to in the financing contract. In Oracle Leasing and Finance Management, some of the terms and conditions are determined when you select the financial product with which you are associating the contract. When you set up the product, you choose values, some of which translate to fields in the terms and conditions section.
You can also pre-set terms and conditions through a reference to a vendor program or by using a contract template.
Some terms and conditions are required to be completed based on the type of contract and financial product you are using. If any required terms are missing, a validation error is generated during contract activation.
The Terms and Conditions sub-tab of the Contract Details page displays a summary of the terms and conditions associated with the selected contract. Any terms and conditions defaulting from a program agreement, financial product or contract template are displayed. You can add, remove, or update the following terms and conditions:
Asset Filing
Asset Return
Billing Setup
Conditions of Partial Termination Quote
Contract Portfolio
Early Termination Purchase Option, Contract
End of Term Purchase Option
Evergreen Eligibility
Evergreen Passthrough
Factoring
Gain/Loss Options on Termination Quotes
Late Charges
Late Interest
Prefunding
Quote Approver
Quote Courtesy Copy
Quote Recipient
Renewal Options
Repurchase Quote Calculation
Residual Value Insurance
Security Deposit
Taxes and Duties
Termination Quote Calculation – Early Termination, Contract
Termination Quote Calculation – End of Term, Contract
Termination Quote Process
The term for Taxes and Duties is automatically populated on all contracts.
You must have retrieved or be in the process of creating a contract.
Perform the following steps in the Terms and Conditions sub-tab of the Contract Details page:
Select the term you want to add from the list of values above the summary table and click Go. The page for the selected terms opens.
Enter the applicable details. See the field references for each area of terms and conditions.
Click Apply
Perform the following steps in the Terms and Conditions sub-tab of the Contract Details page:
Select the Update icon on the row of the term you want to update from the list of terms in the summary table. The update page for the selected term opens.
Update the applicable details. See the field references for each area of terms and conditions.
Click Apply.
To properly calculate and bill for taxes and other duties for a contract, enter the details in the Taxes and Duties terms.
The following table describes selected fields in the Terms and Conditions Taxes and Duties page.
| Field | Description |
|---|---|
| Property Tax Applicable | The enabled check box indicates that you intended to calculate and assess property tax for the assets on the contract. |
| Lessee To Report | The enabled check box indicates the lessee will calculate and report any applicable property taxes that are due for the contract. |
| Bill Tax | The method you select determines how property taxes will be collected from the lessee.
|
| Update Lines from Contract | The enabled check box indicates that the tax details you enter for an asset will be updated when you update the tax details in contract terms and conditions. This flag overrides any flag you set for an individual asset. |
| Interest Disclosed | An enable check box indicates that you intend to disclose interest amounts payable on the contract. There is no automatic processing of interest disclosure based on this field, but you can use it as a determinant in your tax calculation setups. |
| Transfer of Title | An enable check box indicates that you intend to transfer the title to lessee party of the contract. There is no automatic processing of the asset title based on this field, but you can use it as a determinant in your tax calculation setups. |
| Sale and Lease Back | An enable check box indicates that the assets were purchased from the lessee for the contract. There is no automatic processing of lessee fundings based on this field, but you can use it as a determinant in your tax calculation setups. |
| Purchase of Lease | An enable check box indicates that you purchased the lease contract from another party. There is no automatic processing based on this field, but you can use it as a determinant in your tax calculation setups. |
| Intended Use for Tax | Select the usage basis of the equipment. There is no automatic processes based on this field, but you can use it as a determinant in your tax calculation setups. |
| Age of Equipment | Enter the age of the equipment if it is not new. There is no automatic processing based on this field, but you can use it as a determinant in your tax calculation setups. |
| Asset Upfront Tax | Enter the method you want to use for processing any upfront taxes calculated for the contract.
|
| Billing Stream Type | If you selected Billing as the Asset Upfront Tax Method, select a stream type to use on the invoice. |
| Financed Fee Stream Type | If you selected Financed as the Asset Upfront Tax Method, select a stream type to use on the financed fee line. |
| Capitalized Stream Type | If you selected Capitalize as the Asset Upfront Tax Method, select a stream type to use on the capitalized fee line. |
| Tax Schedule Applies | An enabled check box indicates you will generate a tax schedule for tax payments that are due. |
In order to properly invoice a customer, you must enter where to send invoices, what method the customer uses to make payments, and whether invoices need a manual review by an agent, for example.
Set up billing addresses, payment methods, and invoice formats.
The following table describes selected fields in the Terms and Conditions Billing Setup page.
You must use Oracle Receivables or another Oracle module that uses Oracle’s Trading Community Architecture (TCA) to setup and maintain parties and related customer accounts, addresses, payment methods, and bank accounts.
| Field | Description |
|---|---|
| Bill To Address | The customer billing site from the list of Bill To Addresses you set up for your customer account where invoices are sent. |
| Payment Method | The method (from the customer's account site) that the customer uses to make payments. |
| Bank Account | The customer's bank account number if needed for the payment method. The customer record stores bank account numbers along with other customer information. |
| Cash Application Rules | The cash application rule that you want to be used when processing receipts for this contract’s invoices. If you leave this field blank, the default cash application rule will apply for this contract. See Define Cash Application Rules, Oracle Leasing and Finance Management Implementation Guide. |
| Invoice Format | The invoice format group. The invoice group you select determines what appears on the customer's invoices, what billing types are included, whether certain billing types are combined, and whether each leased asset should appear on a separate line. See Oracle Leasing and Finance Management Implementation Guide. |
| Print Lead Days | The print lead days value defined on the contract is used for stream-based and variable rate billing to determine the number of days before the payment due date to create an invoice. |
| Review Invoice | The Review Invoice check box sorts the customer's invoices during printing preparation for a manual review so you can separate the invoices you do not want to directly mail. |
| Reason for Review | The reason for the manual review, if applicable. |
| Review Until Date | The date the manual invoice review ends. After this date, the invoices for this contract are no longer sorted in a separated manner during printing. |
You must set the policies governing late charges and late interest that are applicable to past due invoice amounts and billed to customers who do not make payments by the invoice due date.
Set up late polices.
You can assess either a late charge or late interest for invoice amounts that are not paid by customers on or before the invoice due date. A late charge is assessed only once on the first billing run that the invoice becomes past due as defined in your late charge policy. Late interest is assessed for each billing period the invoice amount remains outstanding.
The following table describes the fields in the Terms and Conditions Late Charges page.
| Field | Description |
|---|---|
| Late Charges Held Until | The date on which you want to begin applying late charges in the event of late payments. |
| Late Charge Exempt | Enabled check box indicates that you are not charging the customer late fees for this contract. |
| Late Charge Policies | The late fee policy that applies to this contract from the list of values.You can set up late charge policies to include a variety of information, such as whether the charge is a flat fee or a percentage, the grace period, and the minimum and maximum amounts assessed as a late charge. This policy also sets a minimum balance, which if the amount due is less than, no late charge is assessed. See Create Late Polices, Oracle Leasing and Finance Management Implementation Guide. |
The following table describes the fields in the Terms and Conditions Late Interest page.
| Field | Description |
|---|---|
| Late Interest Held Until | The date on which late interest begins being applied to the contract, in the event of late payments. |
| Late Interest | The late interest policy that applies to this contract from the list of values. You can set up late interest policies to include the maximum and minimum amounts of late interest to charge to the contract, whether the interest rate is fixed or variable, the grace period, and the minimum balance, beneath which no late interest is charged. |
| Late Interest Exempt | Enabled check box indicates that you are not charging the customer late interest for this contract. |
Renewal options allow you to record information you can use to update a contract for a renewal when the contract is at or near end-of-term. The application does not automatically process the options.
The following table describes the fields in the Terms and Conditions Renewal Options page.
| Field | Description |
|---|---|
| Renewal Notice Days | The number of days before the end of the term that you are required to notify the customer of the renewal option for this contract. |
| Renewal Option | The renewal option for the contract. |
| Renewal Amount | The amount of the renewal option, if required for the selected renewal option method. |
If the contract specifies them, then you can enter values that govern pre-funding, security deposit, factoring, and evergreen options and settings.
The following table describes the fields in the Terms and Conditions Pre-funding page.
| Field | Description |
|---|---|
| Index Name | Index Name |
The following table describes the fields in the Terms and Conditions Security Deposit page.
| Field | Description |
|---|---|
| Held Until Maturity | Enabled check box indicates the security deposit is held until the end date of the contract. |
| Net From Proceeds | Enabled check box indicates that the security deposit refund is netted from the termination amount paid to terminate a contract. |
| Held Until Date | The date until which you must hold the security deposit. |
The following table describes the fields in the Terms and Conditions Factoring page where you can record information you use to factor streams. The factoring calculations and stream modifications are not processed automatically.
| Field | Description |
|---|---|
| Date | The date on which the streams were factored. |
| Percentage | The percentage amount to factor revenue streams (such as a split between two entities) for the contract. |
| Discount Rate | The discount rate to factor streams. |
The following table describes the field in the Terms and Conditions Evergreen Eligibility page.
| Field | Description |
|---|---|
| Evergreen Eligibility Eligible | Enabled check box indicates the contract is eligible for evergreen rents. When the contract passes its initial term end date, evergreen rents are billed until the assets are returned or the contract is terminated. |
The following table describes the fields in the Terms and Conditions Evergreen Passthrough page. You use this term when you want to share evergreen rents with a third party.
| Field | Description |
|---|---|
| Payout Basis | Select the basis on which evergreen rents are paid to a third party. You can pay them based on when the invoice is billed, when an invoice is partially or fully paid or based on a formula you set up. |
| Evergreen Formula | If you select the Formula Payout Basis, then you must select the formula name. |
| Passthrough Stream Type | The stream type you select is used to create the disbursement transaction. The stream type can be used to determine the accounting for the disbursed evergreen rent and appears on the payable invoice line used to make a payment to the payee party. |
If the residual value of the lease is insured, then you can enter the details. If you are using an external stream generation engine that supports this feature and want to automatically calculate the amount of residual to insure to obtain a finance lease book classification, then you can select the option and enter the rate for the premium. The pricing engine:
Determines the minimum amount of the residual that you must insure to classify the lease as direct finance lease.
Calculates the fee premium for the insurance and automatically adds an expense fee line to your contract.
The following table describes the fields in the Terms and Conditions Residual Value Insurance page.
| Field | Description |
|---|---|
| Automatically Calculate Residual Value Insurance | Enabled check box indicates the pricing engine automatically calculates the residual value insurance amount and premium. |
| Residual Value Insurance Rate | The rate to calculate the premium. |
| Stream Type | The stream type used on the expense fee created for the insurance premium. |
If you plan to file a lien on the contract or hold a title and/or registration, then you can record that information in the terms and conditions. Any lien or title information entered as a term applies to the entire contract. You also can set up filing options at the asset level when you create assets for the contract.
See Choose Asset Filing Options Properties under Set Up Asset Lines.
The following table describes the fields in the Liens section of the Terms and Conditions Filling Options page.
| Field | Description |
|---|---|
| Lien Type | The Lien type for the filing. |
| Filing Number | The filing number of the lien |
| Filing Date | The filing date of the lien. |
| Status | The status of the lien. |
| Lien Holder | The party holding the lien from the list of values, if the party is not the lessor. |
| Jurisdiction | The jurisdiction with which the lien was filed. |
| Sub-Jurisdiction | The sub-jurisdiction with which the lien was filed. |
| Expiration Date | The expiration date of the lien filing. |
| Continuation Number | The continuation number of the lien extension, if applicable. |
| Continuation Date | The date on which the lien extension expires. |
The following table describes the fields in the Title and Registrations section of the Terms and Conditions Filling Options page.
| Field | Description |
|---|---|
| Title Type | The type of title or registration held for this contract. |
| Title Issuer | The name of the organization issuing the title or registration. |
| Title Date | The date the title was issued. |
| Title Number | The title document number. |
| Registration Number | The registration number. |
| Location | The registered location of the assets. |
| Title Custodian | The party having physical custody of the title. |
| Payee Site | The remit to address of the title custodian. Fees to the title custodian are not paid automatically. |
| Registration Location | The location where the registration was obtained. |
| Registration Expiration Date the date the registration expires. | The date the registration expires. |
After a lessee returns an asset, you must define the information used to set up the asset for resale with a buyer. If you have the right to sell a returned asset to the vendor or another third party, then you set up terms that are used to calculate the repurchase quote.
When you set up a repurchase quote, you use a formula to determine the components of the quote calculation, such as the sale price, discounts and fees. Then for each quote calculation component, you decide:
A calculation basis. This determines whether to use a fixed amount or a formula to calculate the amount of that quote component.
A prorate option. The prorate option determines whether the calculation you define is performed for each individual asset or for the entire quote, then prorated to each asset on the quote.
Define formulas, if you are using them in these terms and conditions.
The following table describes the fields in the Terms and Conditions Asset Return page.
| Field | Description |
|---|---|
| Floor Price Formula | The formula that calculates the minimum price acceptable for remarketing the contract assets, if any. |
| Remarket Sale Price Formula | The formula that calculates the sale price at which you want to remarket an asset returned from this contract. |
The following table describes the fields in the Terms and Conditions Repurchase Quote Calculation page.
| Field | Description |
|---|---|
| Repurchase Agreement | Enabled check box allows a repurchase option for the program vendor of this contract or another third party. |
| Repurchase Quote Formula | If you enable a repurchase agreement option, you specify the base formula used to calculate the repurchase quote amounts. This formula must include the options you choose for sales price, discount, and quote fees. |
| Sale Price Option | The sales price option determines the basis for calculating the repurchase sale amount. |
| Sale Price Amount | The sale price amount, if the sales price option is a fixed amount. |
| Sale Price Formula | The sale price formula, if you are using a formula. |
| Sale Price Prorate | Indicate whether to prorate, not prorate, or calculate and prorate at the line level. |
| Discount Rate Option | The discount rate option determines the basis for calculating any standard discount on the repurchase quote. |
| Discount Rate Amount | The discount rate amount, if the amount is fixed. |
| Discount Rate Formula | The discount rate formula, if you are using a formula. |
| Discount Rate Prorate | The discount rate prorate option. |
| Quote Fee Option | The quote fee option, if applicable |
| Quote Fee Amount | The quote fee amount, if you selected a fixed amount for the quote fee option. |
| Quote Fee Formula | The quote fee formula, if you selected a formula to figure the quote fee option. |
| Quote Fee Prorate | The quote fee prorate option. |
For all contracts you must define purchase options, even if there is no option. You determine separate terms for an early termination purchase option and the end-of-term purchase option.
The application uses the purchase option to calculate the purchase amounts on termination quotes when the lessee wishes to terminate the contract and purchase the financed equipment. The purchase option may also impact your deal book or tax classifications.
You determine whether to use a formula to calculate the purchase amount or whether to use a fixed amount. You can set up terms that automatically bill for any fixed purchase options.
You also determine whether to calculate the purchase option values for each line or to prorate whereby the value is calculated for the entire quote, then prorated to each asset line based on asset cost.
Define formulas, if you are using them in these terms and conditions.
Set up stream types with the stream type purpose of Quote Purchase Amount. For information on the Quote Purchase Amount stream type, see Stream Purposes, Oracle Lease Management Implementation Guide.
The following table describes the fields in the Terms and Conditions Early Termination Purchase Options page.
| Field | Description |
|---|---|
| Purchase Option | Indicates whether the purchase option should be a fixed amount, or determined by a formula, if applicable. If no early termination purchase option is allowed, accept the default value of Not Applicable. |
| Purchase Option Type | The type of purchase option. $1 Buyout is a fixed purchase option valued at $1. A fixed purchase option is a predefined fixed price that is agreed to by the lessor/lessee while writing a contract.
Note: If you select $1 Buyout or Fixed Purchase Option, you must select the Automatically Process the Fixed Purchase Option check. |
| Purchase Option Amount | The purchase option amount, if the purchase option requires a fixed amount. |
| Purchase Option Formula | The purchase option formula, if the option requires a formula. |
| Purchase Option Prorate | The purchase option prorate setting you want to use. If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Purchase Option Maximum Option | The purchase option maximum option, if applicable. If you set a purchase option maximum, then the purchase option price cannot exceed this set price. |
| Purchase Option Maximum Amount | The maximum amount of purchase option, if you are using a fixed maximum amount. |
| Purchase Option Maximum Formula | The purchase option formula, if you are using a formula. |
| Purchase Option Minimum Option | The purchase option minimum option, if applicable. If you set a purchase option minimum, then the purchase option price cannot fall below this set price. |
| Purchase Option Minimum Amount | The purchase option minimum amount, if you are using a fixed minimum amount. |
| Purchase Option Minimum Formula | The purchase option minimum formula, if you are using the formula.
Note: Maximum and Minimum amounts do not apply if the Purchase Option Type is $1 Buyout or No Purchase Option. |
The following table describes the fields in the Terms and Conditions End of Term Options page.
| Field | Description |
|---|---|
| Purchase Option | The end-of-term purchase option, if applicable. If an end-of-term purchase option is not allowed, select Not Applicable and then select No Purchase Option in the following step. |
| Purchase Option Type | The type of purchase option. $1 Buyout is a fixed purchase option valued at $1. A fixed purchase option is a predefined fixed price that is agreed to by the lessor/lessee while writing a contract.
Note: If you select $1 Buyout or Fixed Purchase Option, you must select the Automatically Process the Fixed Purchase Option check. |
| Purchase Option Amount | The purchase option amount, if the purchase option requires a fixed amount. |
| Purchase Option Formula | The purchase option formula, if the purchase option requires a formula. |
| Purchase Option Prorate | The purchase option prorate setting that you want to use.
Note: If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Purchase Option Maximum Option | The purchase option maximum option, if applicable. |
| Purchase Option Maximum Amount | The purchase option maximum amount, if you are using a fixed maximum amount. If you set a purchase option maximum amount, the purchase option price cannot exceed this amount. |
| Purchase Option Maximum Formula | The purchase option maximum formula, if you are using a formula. |
| Purchase Option Minimum Option | The purchase option minimum option, if applicable. |
| Purchase Option Minimum Amount | The purchase option minimum amount, if you are using a fixed minimum amount. |
| Purchase Option Minimum Formula | The purchase option minimum formula, if you are using a formula.
Note: Maximum and Minimum amounts do not apply if the Purchase Option Type is $1 Buyout or None. |
| Automatically Process Fixed Purchase Option | Selecting the Automatically Process the Fixed Purchase Option check box is optional.
Note: If you select the Automatically Process the Fixed Purchase Option check box, you must have selected $1 Buyout or Fixed Purchase Option as the type of purchase option. Additionally, you must not select the Evergreen Eligible check box while authoring the contract in the Create Service page, Create Fee page, or Terms and Conditions page. If you select the Automatically Process the Fixed Purchase Option check box, an invoice is automatically generated for the purchase option amount at the end of the life of the contract, and the sale of the asset to the lessee is processed. Whether you select the Automatically Process the Fixed Purchase Option check box is dependent on whether you intend to automatically process the purchase option selected by the lessee as the type of purchase option. If the Automatically Process the Fixed Purchase Option check box is not selected, the asset is returned to the lessor. |
You specify parameters that determine which types of termination and termination quotes are allowed for the contract.
Manual termination quote processes are allowed for all contracts; you can restrict the contract to manual termination quotes only.
Automatic termination quote processes will use calculated parameters values that you set up in the termination quote calculation terms and conditions. See Set Up Early Termination Quote Calculation Terms and Conditions and Set Up End-of-Term Termination Quote Calculation Terms and Conditions.
You can specify whether early termination is allowed for the contract. You set the parameter, End of Term Tolerance Days, that defines how many days prior to the end of term date you consider an acceptable tolerance to still use end-of-term quote calculations. Any termination prior to that is considered an early termination.
You can specify whether partial termination is allowed, that is, whether part of the contract can be terminated.
You can also specify other termination quote parameters, such as gain/loss information, quote approver, and the parties to whom you want to send the termination quote.
Define formulas, if you are using them in these terms and conditions.
The following table describes the fields in the Terms and Conditions Termination Quote Process page.
| Field | Description |
|---|---|
| Manual Quotes Only | Enabled check box indicates that you do not want to allow automatic termination quotes. |
| Early Termination Allowed | Enabled check box allows early termination |
| First Termination Date | The earliest possible termination date, if applicable. |
| Send Bill of Sale | Enabled check box allows the bill of sale to be sent to lessee. |
| Quote Effective Days | The number of days you want the termination quote to remain in effect after the date that you create the termination quote. |
| This value determines the default expiration date that appears when you are creating termination quotes for specific assets. | |
| Quote Effective Maximum Days | The maximum number of days you want the user to be able to manually adjust the Effective To date. |
| For example, if the Quote Effective Days in step 6 is 30, and you set the Quote Effective Maximum Days for 40, the user in Asset Management can extend the End Date by 10 days. | |
| End of Term Tolerance Days | The number of days that the end-of-term agreement day is still in effect. |
| If you set a tolerance of 10 days, for example, a deal that terminates nine days prior to the Termination End Date still qualifies as an End of Term termination. |
The following table describes the fields in the Terms and Conditions Gain/Loss Options on Termination Quote page.
| Field | Description |
|---|---|
| Approval Required | Enabled check box indicates the partial termination requires approval when the partial termination generates a financial impact (Gain/Loss). |
| Net Quote Option | The Net Quote Option, if applicable. |
| Allow for a Net Quote Option if you want to offset some amount against the quote option in the event that a partial termination is exercised. | |
| Net Quote Amount | the Net Quote Amount, if the Net Quote is a fixed amount. |
| Net Quote Formula | The Net Quote Formula, if you are using a formula. |
| Tolerance Allowed Option | The tolerance allowed option, if applicable. |
| Tolerance Allowed Amount | The amount of variance between the actual termination amount and the net quote amount (figured by fixed amount or formula). |
| This field accepts positive and negative numbers. Positive numbers are assumed; to enter a negative number, use a dash (-) in front of the number. | |
| In the case of negative numbers, the figure entered is the amount of a loss you are allowing. With positive numbers, this is the amount over the Net Quote figure that you require to accept the quote. | |
| Tolerance Allowed Formula | The Tolerance Allowed formula, if you are using a formula. |
The following table describes the fields in the Terms and Conditions Quote Approver page.
| Field | Description |
|---|---|
| Approver | The party to approve the termination quote before it is sent. |
| Advance Notice | The party who receives notification before the quote is sent. |
| Delay Days | The number of days to delay before the quote is sent, when you specify an Advance Notice party. |
Note: All the fields are optional. However if you choose to select and enter values in this section, then you must observe the following guidelines:
If you specify the Approver, then you must not specify Advance Notice nor Delay Days.
If you specify the Advance Notice party, then you must also specify Delay Days, and you must not specify the Approver.
The following table describes the fields in the Terms and Conditions Quote Courtesy Copy page.
| Field | Description |
|---|---|
| Courtesy Copy | The party to notify for informational purposes. |
The following table describes the fields in the Terms and Conditions Quote Recipient page.
| Field | Description |
|---|---|
| Main Recipient | The main recipient for the quote. |
| Additional Recipient | The additional recipient, if you want to have another recipient for the quote. |
| Allocation Percentage | The percentage by which you are splitting the billing for the additional recipient. |
The following table describes the fields in the Terms and Conditions for Partial Termination Quote page.
| Field | Description |
|---|---|
| Approval Required | Enabled check box indicates that a partial termination requires approval. |
| Partial Termination Allowed | Enabled check box enables partial termination. |
If you allow early termination of the contract, you must set up the details for calculating the quote. The calculations used to create an early termination quote work in concert with the early termination purchase option parameters you input earlier (see Set Up Purchase Options Terms and Conditions) to settle the financial obligations of the contract at termination.
The components you can use to calculate the quote include contract obligation, purchase amount, discount rates, quote fee, return fee, rollover incentive, security deposit, and termination penalty.
The primary termination quote formula you select determines the components that will be used in your termination quotes. Your formula must use one or more of the seeded operands. Any operand you do not include in your termination quote formula will not be calculated or included in your quote total.
The following table shows the seeded operands that you can use to create termination quote formulas.
| Operand Name | Description | Corresponding Terms & Conditions Heading |
|---|---|---|
| AMBCOC | Contract Obligation | Contract Obligation |
| AMCTOC | Principal Balance | Contract Obligation |
| AMCTUR | Unbilled Receivables | Contract Obligation |
| AMBPOC | Purchase Amount | Purchase Options (screen) |
| AMCQDR | Discount | Discount Rate |
| AMCTPE | Termination Penalty | Termination Penalty |
| AMCSDD | Security Deposit Disposition | Security Deposit |
| AMCRFE | Return Fee | Return Fee |
| AMCRIN | Rollover Incentive | Rollover Incentive |
| AMCQFE | Quote Fee | Quote Fee |
| AMYOUB | Outstanding Balance | Outstanding Balances |
| AMYSAM | Service and Maintenance | Service and Maintenance |
| AMCTAX | Tax / VAT | Tax / VAT |
| AMBSPR | Sale Price | Sale Price |
| AMPRTX | Estimated Property Tax | Estimated Property Tax |
| AMYFEE | Contractual Fee | Contractual Fees |
Each seeded operand relates to a corresponding quote component. Each seeded operand can be modified to include any calculation you want to use for the related quote component, but you must use the operands specified. For each quote component, other terms you enter will be used to determine how the formula operand amount is derived.
Oracle Leasing and Finance Management has seeded formulas that correspond with the Termination Quote Formula and each of the Terms. See Define Formulas, Oracle Lease Management Implementation Guide.
When you enter terms for the quote components you can determine the basis for calculation. The basis may be a fixed amount or a formula. If you select fixed amount, you must enter an amount. If you select formula, you must select a formula that includes the seeded operands for that component. You also determine a prorate option. The prorate option determines whether the calculation will be executed for each line or prorated whereby the calculation is done for all assets on the termination quote and then prorated to each asset line based upon asset cost.
The terms you enter are only valid for the contract being authored and not other contracts you may enter later. The terms only apply for early termination quotes. This includes termination dates that fall before the end of term tolerance. To determine the end of term tolerance, the tolerance days from the terms and conditions Termination Quote Process are subtracted from the contract end date. Any termination date that falls before that date uses the terms for Early Termination Quotes to calculate quote amounts.
To specify terms for calculating termination quotes after the end of term tolerance date, enter values in the terms and conditions for End of Term Termination Quote Calculations.
Define formulas, if you are using them in these terms and conditions.
The following table describes the fields in the Terms and Conditions Termination Quote Calculation – Early Termination page.
| Field | Description |
|---|---|
| Termination Quote Formula | The formula that calculates the termination quote, if applicable. The formula should consist of one or more of the seeded operands that correspond to the quote components. |
| Contract Obligation Option | The contract obligation option, if applicable. The contract obligation is the amount you want to charge for the remaining contractual payments associated to assets. |
| Contract Obligation Amount | The Contract Obligation Amount, If you are using a fixed amount for the contract obligation. |
| Contract Obligation Formula | The Contract Obligation Formula, If you are using a formula. The seeded operand calculates the sum of the unbilled (future) rents, plus unpaid fees, discounted to the termination date and reduced by any advanced rent paid.
Note: Contract Obligation formulas must include either the AMCTOC (Principal Balance) or the AMCTUR (unbilled receivables) operand in the formula. Also, the corresponding operand must be included in the Quote Calculation formula. You can include the contract obligation operand (AMBCOC) in the top formula and in the contract obligation formula to account for any additional amounts. |
| Contract Obligation Prorate | The prorate option for the contract obligation. If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Discount Rate Option | The discount rate option, if you have negotiated a discount rate for the early termination. A discount rate will reduce the amount of the termination quote at the rate specified. If no discount rate is figured into the quote calculation, select the default: Not Applicable. |
| Discount Rate Amount | The Discount Rate Amount, if you are using a fixed amount for the discount rate. |
| Discount Rate Formula | The Discount Rate Formula, if you are using a formula. |
| Discount Rate Prorate | The prorate option for the discount rate. |
| Quote Fee Option | The quote fee option, if you have negotiated a quote fee for the early termination. The quote fee will increase the amount of the termination quote. If you elect to waive the quote fee, select the default: Not Applicable. |
| Quote Fee Amount | The Quote Fee Amount, if you are using a fixed amount for the quote fee. |
| Quote Fee Formula | The Quote Fee Formula, if you are using a formula. |
| Quote Fee Prorate | The prorate option for the quote fee. |
| Return Fee Option | The return fee option, if you have negotiated a return fee for the asset as part of the early termination quote. A return fee will increase the amount of the termination quote. If you elect to waive the return fee, select the default: Not Applicable. |
| Return Fee Amount | The Return Fee Amount, if you are using a fixed amount for the return fee. |
| Return Fee Formula | The Return Fee Formula, if you are using a formula. |
| Return Fee Prorate | The prorate option for the return fee. |
| Rollover Incentive Option | The rollover incentive option, if it applies. A rollover incentive amount will reduce the quote amount if the quote type is “rollover”. Rollover quotes are calculated termination amounts you intend to finance as a fee on a new contract for the same customer. If you are not supplying a rollover incentive, select the default: Not Applicable. |
| Rollover Incentive Amount | The Rollover Incentive Amount, if you are using a fixed amount for the rollover incentive. |
| Rollover Incentive Formula | The Rollover Incentive Formula, if you are using a formula. |
| Rollover Incentive Prorate | The prorate option for the rollover incentive. |
| Security Deposit Disposition Option | The security deposit disposition option, if you have negotiated a security deposit disposition. If you are not including the security deposit in the termination calculation, select the default: Not Applicable. (For example, there may be no security deposit for the contract, or you may have already returned the security deposit, for example.) |
| Security Deposit Disposition Amount | The Security Deposit Disposition Amount, if you are using a fixed amount for the security deposit. |
| Security Deposit Disposition Formula | The Security Deposit Disposition Formula, if you are using a formula. |
| Security Deposit Disposition Prorate | The prorate option for the security deposit. |
| Termination Penalty Option | The termination penalty option, if you have negotiated a penalty amount for an early termination. A termination penalty will increase the amount of the termination quote. If there is no termination penalty, select the default: Not Applicable. |
| Termination Penalty Amount | The Termination Penalty Amount, if you are using a fixed amount for the termination penalty. |
| Termination Penalty Formula | The Termination Penalty Formula, if you are using a formula. |
| Termination Penalty Prorate | The prorate option for the termination penalty. |
| Termination Penalty Cap Option | The termination penalty cap option to determine the cap, if you are setting a penalty cap amount. The total termination penalty cannot exceed this value. |
| Termination Penalty Cap Amount | The Termination Penalty Cap Amount, if you are using a fixed amount for the termination penalty cap. |
| Termination Penalty Cap Formula | Termination Penalty Cap Formula, if you are using a formula. |
| Expense Fee Formula | This formula will determine the amount to add to the termination quote to recover the cost of any expense fees on the contract. |
| Financed Fee Formula | This formula will determine the amount to add to the termination quote to recover the amount of any unpaid financed fees on the contract. |
| General Fee Formula | This formula will determine the amount to add to the termination quote to recover the cost or unpaid amounts associated to general fees on the contract. |
| Income Fee Formula | This formula will determine the amount to add to the termination quote to recover any unpaid income fees on the contract. |
| Miscellaneous Fee Formula | This formula will determine the amount to add to the termination quote to recover the cost of unpaid amounts associated to a miscellaneous fee on the contract. |
| Passthrough Fee Formula | This formula will determine the amount to add to the termination quote to recover the amount of any unpaid pass through fees on the contract. |
| Estimated Property Tax Option | The estimated property tax option, if you are including estimated property taxes in the early termination quote. The amount of any estimated property tax will be added to the termination quote amount. If there is no estimated property tax, select the default: Not Applicable. |
| Estimated Property Tax Amount | The Estimated Property Tax Amount, if you are using a fixed amount for the estimated property tax. |
| Estimated Property Tax Formula | The Estimated Property Tax Formula, if you are using a formula. |
| Estimated Property Tax Prorate | The prorate option for the estimated property tax amount. |
| Rollover Fee | This formula determines the amount to add to the termination quote to recover the amount for any unpaid rollover fees on the contract. |
| Contractual Fees Option | Enabled check box includes contractual fees in the calculation of the quote amount. |
| Outstanding Balances Option | Enabled check box indicates that outstanding balances from billed invoices are included on the termination quote. The outstanding amounts are not part of the termination amount, but are displayed on the quote as a separate item. |
| Service and Maintenance Option | Enabled check box indicates that outstanding payments for services will be included on the quote. |
| Service and Maintenance Formula | This formula determines the amount to add to the termination quote to recover the amount for any unpaid service payments on the contract. |
You must enter terms for calculating an end-of-term termination quote for your contracts. The terms are used to calculate the amount due for termination of the contractual payments on the contract. If you use a termination quote type With Purchase, then you must also set up purchase options. (See Set Up Purchase Options Terms and Conditions) to settle the financial obligations of the contract at termination.
The components you can use to calculate the quote include contract obligation, purchase amount, discount rates, quote fee, return fee, rollover incentive, security deposit, and termination penalty.
The primary termination quote formula you select determines the components that will be used in your termination quotes. Your formula must use one or more of the seeded operands. Any operand you do not include in your termination quote formula will not be calculated or included in your quote total.
The following table shows the seeded operands that you can use to create termination quote formulas.
| Operand Name | Description | Corresponding Terms & Conditions Heading |
|---|---|---|
| AMBCOC | Contract Obligation | Contract Obligation |
| AMCTOC | Principal Balance | Contract Obligation |
| AMCTUR | Unbilled Receivables | Contract Obligation |
| AMBPOC | Purchase Amount | Purchase Options (screen) |
| AMCQDR | Discount | Discount Rate |
| AMCTPE | Termination Penalty | Termination Penalty |
| AMCSDD | Security Deposit Disposition | Security Deposit |
| AMCRFE | Return Fee | Return Fee |
| AMCRIN | Rollover Incentive | Rollover Incentive |
| AMCQFE | Quote Fee | Quote Fee |
| AMYOUB | Outstanding Balance | Outstanding Balances |
| AMYSAM | Service and Maintenance | Service and Maintenance |
| AMCTAX | Tax / VAT | Tax / VAT |
| AMBSPR | Sale Price | Sale Price |
| AMPRTX | Estimated Property Tax | Estimated Property Tax |
| AMYFEE | Contractual Fee | Contractual Fees |
Each seeded operand relates to a corresponding quote component. Each seeded operand can be modified to include any calculation you want to use for the related quote component, but you must use the operands specified. For each quote component, other terms you enter will be used to determine how the formula operand amount is derived.
Oracle Leasing and Finance Management has seeded formulas that correspond with the Termination Quote Formula and each of the terms. See: Formulas, Oracle Leasing and Finance Management Implementation Guide.
When you enter terms for the quote components you can determine the basis for calculation. The basis may be a fixed amount or a formula. If you select fixed amount, you must enter an amount. If you select formula, you must select a formula that includes the seeded operands for that component. You also determine a prorate option. The prorate option determines whether the calculation will be executed for each line or prorated whereby the calculation is done for all assets on the termination quote and then prorated to each asset line based upon asset cost.
The terms you enter are only valid for the contract being authored and not other contracts you may enter later. The terms only apply for end of term termination quotes. This includes termination dates that fall within the end of term tolerance. To determine the end of term tolerance, the tolerance days from the terms and conditions Termination Quote Process are subtracted from the contract end date. Any termination date that falls after that date uses the terms for End of Term Termination Quotes to calculate quote amounts.
To enable and allow early terminations, you must select the Early Termination allowed option from the Termination Quote Process terms and conditions and enter terms for Early Termination Quote Calculation.
Define formulas, if you are using them in these terms and conditions.
The following table describes the fields in the Terms and Conditions Termination Quote Calculation – End of Term page.
| Field | Description |
|---|---|
| Termination Quote Formula | The Termination Quote formula that calculates the termination quote. |
| Contract Obligation Option | The contract obligation option, if applicable. The contract obligation is the sum of the unbilled (future) rents, plus unpaid fees, discounted back against the contract and reduced by advanced rent paid. |
| Contract Obligation Amount | The Contract Obligation Amount, if you are using a fixed amount for the contract obligation. |
| Contract Obligation Formula | The Contract Obligation Formula, if you are using a formula.
Note: Contract Obligation formulas must include either the AMCTOC (Principal Balance) or the AMCTUR (unbilled receivables) operand in the formula. Also, the corresponding operand must be included in the Quote Calculation formula. You can include the contract obligation operand (AMBCOC) in the top formula and in the contract obligation formula to account for any additional amounts. |
| Contract Obligation Prorate | The prorate option for the contract obligation. If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Discount Rate Option | The discount rate option, if you have negotiated a discount rate for the end of term termination. If no discount rate is figured into the quote calculation, then select the default: Not Applicable. |
| Discount Rate Amount | The Discount Rate Amount, if you are using a fixed amount for the discount rate. |
| Discount Rate Formula | The Discount Rate Formula, if you are using a formula. |
| Discount Rate Prorate | The prorate option for the discount rate. If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Quote Fee Option | The quote fee option, if you have negotiated a quote fee for the end of term termination. If you elect to waive the quote fee, then select the default: Not Applicable. |
| Quote Fee Amount | The Quote Fee Amount, if you are using a fixed amount for the quote fee. |
| Quote Fee Formula | The Quote Fee Formula, if you are using a formula. |
| Quote Fee Prorate | The prorate option for the quote fee. If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. |
| Return Fee Option | The return fee option, if you have negotiated a return fee for the asset as part of the end of term termination quote. If you elect to waive the return fee, then select the default: Not Applicable. |
| Return Fee Amount | The Return Fee Amount, if you are using a fixed amount for the return fee. |
| Return Fee Formula | The Return Fee Formula, if you are using a formula. |
| Return Fee Prorate | The prorate option for the return fee. |
| If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs | |
| Rollover Incentive Option | The rollover incentive option, i you have included a rollover incentive, which allows the contract to roll over into a new contract. |
| If you are not supplying a rollover incentive, select the default: Not Applicable. | |
| Rollover Incentive Amount | The Rollover Incentive Amount, if you are using a fixed amount for the rollover incentive. |
| Rollover Incentive Formula | The Rollover Incentive Formula, if you are using a formula. |
| Rollover Incentive Prorate | The prorate option for the rollover incentive. |
| If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. | |
| Security Deposit Disposition Option | The Security Deposit option, if you have negotiated a security deposit disposition. |
| If you are not including the security deposit in the termination calculation, select the default: Not Applicable. (For example, there may be no security deposit for the contract, or you may have already returned the security deposit, for example.) | |
| Security Deposit Disposition Amount | The Security Deposit Disposition Amount, if you are using a fixed amount for the security deposit. |
| Security Deposit Disposition Formula | The Security Deposit Disposition Formula, if you are using a formula. |
| Security Deposit Disposition Prorate | The prorate option for the security deposit. |
| If you choose Line Calculation, then the formula is run against each of the individual contract lines and no proration occurs. | |
| Termination Penalty Option | The termination penalty option, if you have negotiated a penalty amount for an end of term termination. |
| If there is no termination penalty, select the default: Not Applicable | |
| Termination Penalty Amount | The Termination Penalty Amount, if you are using a fixed amount for the termination penalty. |
| Termination Penalty Formula | The Termination Penalty Formula, if you are using a formula. |
| Termination Penalty Prorate | The prorate option for the termination penalty. |
| If you choose Line Calculation, then the formula is run against each of the individual contract lines and there is no proration. | |
| Termination Penalty Cap Option | The termination penalty cap option, if you are setting a penalty cap amount. |
| Termination Penalty Cap Amount | The Termination Penalty Cap Amount, if you are using a fixed amount for the termination penalty cap. |
| Termination Penalty Cap Formula | The Termination Penalty Cap Formula, if you are using a formula. |
| Expense Fee Formula | |
| Financed Fee Formula | |
| General Fee Formula | |
| Income Fee Formula | |
| Miscellaneous Fee Formula | |
| Passthrough Fee Formula | |
| Estimated Property Tax Option | The estimated property tax option, if you are including estimated property taxes in the end of term termination quote. |
| If there is no estimated property tax, select the default: Not Applicable. | |
| Estimated Property Tax Amount | The Estimated Property Tax Amount, if you are using a fixed amount for the estimated property tax. |
| Estimated Property Tax Formula | The Estimated Property Tax Formula, if you are using a formula. |
| Estimated Property Tax Prorate | The prorate option for the estimated property tax amount. |
| If you choose Line Calculation, then the formula is run against each of the individual contract lines and there is no proration. | |
| Rollover Fee | |
| Contractual Fees Option | Enabled check box includes Contractual Fees in the calculation. |
| Outstanding Balances Option | Enabled check box includes outstanding balances in the calculation. Oracle Leasing and Finance Management accesses Receivables to return this amount. |
| Service and Maintenance Option | Enabled check box includes Service and Maintenance fees in the calculation. |
| Service and Maintenance Formula | The Service and Maintenance Formula, if applicable. |
You can set up a contract portfolio to manage the contract profitability during its life in this section. The contract portfolio allows you to enter your expected profit budget for the contract (either as a fixed amount or through the use of a formula), which you can subsequently track by initiating a concurrent program.
The budget amount entered in the contract portfolio (which represents the amount of profit you expect to make through the life of the contract) is stored when you book a contract and does not change if you rebook the contract. In this way, you can track a contract through multiple revisions, while maintaining an accurate account of the budget set at the time of original booking.
You can also set up a notification schedule and contract management strategy, if you want to take actions on the contract prior to the contract’s end of term. For example, if you want to contact your equipment vendor to inquire about upgrades, you can set up a notification schedule to implement this process.
Oracle Leasing and Finance Management runs a concurrent program, which sends a notification of the strategy you want to employ to the assigned asset management team on the specified notification date.
Note: After a contact is booked during authoring, you cannot make any changes to the contract portfolio using the contract authoring or revision process. Any post-booking changes must be made using the contract portfolio management pages. See Maintaining Contract Portfolios.
You must define an assignment group.
Define a budget amount formula, if applicable.
The following table describes the fields in the Terms and Conditions Contract Portfolio page.
| Field | Description |
|---|---|
| Approval Required (check box) | Enabled check box allows the contract portfolio you are creating to be approved prior to booking by initiating an Oracle workflow process that notifies the appropriate manager to approve the portfolio. |
| Assignment Group | The asset management team you want to send notification to regarding the applicable portfolio. |
| Budget Amount Option | The method you want to calculate the contract budget, if any. |
| Budget Fixed Amount | The amount of budget, if you choose a fixed amount. |
| Budget Amount Formula | The Budget Amount Formula, if you choose a formula. |
| Days from Contract Expiration | The amount of days from the contract expiration that you want to implement your portfolio strategy. |
| Strategy | The strategy that you want to implement. This strategy is a text message that is included with the notification that you are sending to the assignment group (for example "Initiate contract to purchase via letter.") |
You set up tax details in terms and conditions that are used for calculating and managing taxes related to the contract. You also have some tax options you can set for individual assets. Before you can calculate taxes for a contract or an asset, you must perform additional setups.
For more information on sales tax, see Sales Tax.
The following table describes the fields in the Terms and Conditions Taxes and Duties page.
| Field | Description |
|---|---|
| Property Tax Applicable (check box) | An enabled check box allows you to calculate and bill for actual or estimated property tax for the contract. |
| Lessee to report (check box) | An enabled check box is for your information purposes to indicate when the lessee has responsibility for calculating, reporting and payment of property taxes for the contract. |
| Bill Tax | You select an option for billing property tax during the life of the contract. You can select from the following values:
|
| Update Lines from Contract | If you select this check box, then the sales tax details you enter in this region will default to the asset line level when you create an asset. If you copy an asset from another asset, the new asset will contain details from the copied asset, not from the default. |
| Interest Disclosed | Indicates the interest amount payable on the contract has been disclosed to the customer. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Transfer of Title | Indicates the title to the assets has been transferred to the customer on the start of the contract. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Sale and Lease Back | Indicates the asset on the contract has been purchased from customer, the lessee, at the start of the contract. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Purchase of Lease | Indicates the lease has been purchased from another lessor. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Intended Use for Tax | Indicates the nature of the usage of equipment. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Age of Equipment | Indicates the length of period of use. This is an information field only. This may impact your transactional taxes for the contract if you setup your tax rules to use this field. |
| Asset Upfront Tax | Determines whether the sales tax is Billed, Financed, or Capitalized. |
| Billing Stream Type | If upfront tax is billed, then select the stream type for the invoice lines. |
| Financed Fee Stream Type | If upfront tax is financed, then the stream type for the financed fee line. |
| Capitalized Fee Stream Type | If upfront tax is capitalized, then the stream type for the capitalized fee line. |
| Tax Schedule Applies (check box) |
When you set up your contract, you can add lines to the contract that represent the financed items as well as other fees and services you include in your deals. Typically, in commercial equipment financing, a deal has at least one asset line. An asset line represents the physical asset being financed. A single asset line may contain multiple units.
For example, if the asset being financed was a copy machine and you are financing 10 units. If the only difference between each copy machine was the serial number, only one asset line is required. You can specify there are 10 units and record the different serial numbers. All item codes you use to set up asset lines must be set up in Oracle Inventory prior to authoring a contract. If you are financing re-leased assets, the asset must be in the correct status in order for you to select it when creating contract asset lines.
Other contract lines have a primary identifier for defining a line, too. For fee lines, you select a stream type, for service lines you select an inventory item marked specifically as a service item and for usage lines; you select a counter (meter). These must all be set up prior to selecting them for defining a contract line.
Oracle Leasing and Finance Management enables you to configure the following contract lines:
Asset
Fee
Service
Usage
Items you intend to finance, such as assets, financed fees, and rollover fees, you add using the Configuration subtab from the Contract Details page. Additional fees and services, including insurance and usage, are added in the Additional Charges subtab. The Configuration sub tab is divided into separate sections for managing asset lines and other financeable fees such as Financed and Rollover type fees.
If you are authoring a new contract, you must add the appropriate asset lines to the contract configuration. To add an asset line, select the appropriate equipment item from a list that is stored in Oracle Inventory. You also enter the quantity of items--a single asset can contain multiple units--and enter other relevant information such as a description of the asset, unit cost, model, manufacturer, installed site, and the fixed asset location. You also enter the residual value details of the asset.
To create asset lines for re-leased assets, you must first enable the contract for re-leased assets by checking the Re-Lease Assets option on the contract details General sub tab. When you create an new asset for a contract enabled for re-lease, you are not selecting an inventory item, but an actual asset that has been made available for re-lease by placing a returned or off-lease asset in the correct status (Manual Release).
Use the Configuration subtab in the Lease Contracts tab to search, create, update, duplicate, and remove the assets associated with a contract. The search results include relevant information about the asset line, including asset number, year, make, description, units, cost, vendor, location, and residual amount. This table is empty if you are authoring a new contract. If you want to view both original assets and split assets, you select the Include Split Assets check box. You can limit your asset search by selecting to filter the asset search results by Supplier, Serial Number or Asset Number. Only those asset lines on the contract that match your search criteria are displayed.
If the contract involves real estate and is classified as a loan, you can also create an asset line for Real Estate. See: Set Up Asset Real Estate Lines on a Loan. When you book, or activate, the contract, Leasing and Finance Management creates asset records in Oracle Assets for assets on non-loan contracts. You use Oracle Assets to manage the depreciation expenses for the assets while they are on your contract and after the assets become off lease asset. When you set up asset lines on your contract, you add references that are used to create the asset record in Oracle Assets. These values enable to you use features available in Oracle Assets. You set up a default asset book for accounting corporate book depreciation in the Setup tab under System Options>Operational Options. You can also set up a default reporting depreciation book if you generate accounting for multiple books (multi-GAAP accounting).
For more information on using Oracle Assets for depreciation expense accounting and other asset management features, see Oracle Assets User Guide.
Set up all equipment items in Oracle Inventory. You must also set up your users to work with a specific inventory organization in the Setup tab for System Options>Operational Options. Inventory items must be associated with default asset categories if you want to automatically populate depreciation parameters for the assets added to contracts.
If you are creating a contract for re-lease, then you must set the returned or off-lease assets to the Manual Release status.
You must have created a contract and entered the mandatory contract details to begin entering assets. Additionally, you must have installed locations.
Perform the following steps in the Configuration subtab of the Contract Details page:
To create a new asset line, click the Create button. The Create Asset page appears.
Enter a required unique alphanumeric value in the Asset Number field.
Select an inventory item for the asset.
Enter a description of the asset line.
Enter the number of units for the line. Each unit has the same information other than serial number.
Enter the unit cost of the item.
Select the applicable asset key. The asset key allows you to categorize your assets once they are created in Oracle Assets upon contract activation.
If this is a Prescribed Asset, for Canadian filing purposes, select the check box. You can use the identifier when you search for assets to report.
Optionally, enter the model type of the asset.
Optionally, enter the manufacturer of the asset.
Optionally, enter the year of the manufacture.
At the Installed Site field, click the flashlight icon, and select the address where the asset is located or installed. The list of addresses you can choose from are the Installed Site locations you set up for the customer record in Oracle Receivables.
At the Fixed Asset Location field, click the flashlight icon, and select the location for the asset from the list of values. The Fixed Asset Location is a key flexfield you set up in Oracle Assets and assign to your asset records. This is not a physical address location, but a location identifier that you can use for managing the financial aspects of your assets related to their location, such as property tax.
Specify the expected delivery and funding dates for the asset. These dates impact the financial calculations of the contract and the defaults the depreciation start date. If you do not enter a date, the contract Effective From (start) Date is used as the default value.
Under the Residual section, enter the Percent of the asset cost that represents the residual amount of the asset.
Alternatively, enter an amount of the residual for the total line cost.
If you choose to enter a residual percentage, then the calculated amount automatically appears in this field.
If there is a Guarantor for the residual, select the role of the guarantor from the list of values.
Enter the amount of the residual guarantee.
Note: Residual guarantees are not automatically processed at the contract end of term.
If you enabled descriptive flexfields for the contract asset line, then enter the applicable additional information for the asset.
Click Apply to save and create the asset. After you save the basic asset details, you can update or enter additional asset line information.
For assets on a non-loan classified contract, you can set up an asset in one corporate asset book, and in one or more tax books in Oracle Assets. The default book for asset addition is derived from the system option you set up in the Setup tab under System Options>Operational Options. You can update the corporate book from the defaulted value when you create new assets. After you select a corporate book, you can select one or more associated tax books for each asset. You are required to set up at least one tax book if your contract book classification has a tax owner value of Lessor. Refer to the user and implementation guides for Oracle Assets for m ore information on setting up and maintaining asset books, depreciation values and asset categories.
Depreciation values for each are derived from the asset book you select and the default asset category for the item you used when you created the asset. You can assign a default asset category for the items in Oracle Inventory. You can accept the defaults derived from Oracle Inventory and Oracle Assets, or override the defaults and set parameters for both asset book depreciation and asset tax depreciation.
If you generate accounting for multiple corporate books (multi-GAAP), the asset is automatically set up in the reporting book you set up in the Setup tab for System Options>Operational Options. An asset is determined to require multi-GAAP accounting when the following conditions are met:
The contract has a financial product with an associated reporting product.
You must have retrieved or be in the process of authoring a contract.
You must set up asset books for corporate, tax, and reporting depreciation.
You must set up depreciation values like method and prorate convention.
You must set up asset categories.
You must assign categories to the inventory items.
In the Depreciation section of the Asset Details page, enter the following details:
In the Book field, select the asset book from Oracle Assets in which this asset is recorded if there is no default value or if you wish to update the default value.
In the Category field, select the asset category from Oracle Assets assigned to this asset if there is no default value or you wish to update the default value. The default value is the assigned category of the master item of the asset based on the value from Oracle Inventory.
In the In-Service Date field, enter the date the asset was placed in service if there is no default value or if you wish to enter a different from the default contract start date.
Enter the depreciable cost if you want to update the default value. The default value is a capitalized cost value that includes the following: (Unit Cost * Units) + (Asset Add-Ons) + (Capitalized Fees) + (Capitalized Interim Interest) - (Capitalized Down Payments) – (Trade-In) – (Capitalized Subsidies).
In the Depreciation Method field, select the method you want to use to for calculating depreciation expenses for the asset in Oracle Assets if there is no default method or if you want to use a different method. The default value is the method assigned to the asset category in Oracle Assets. The asset's depreciable life, also called useful life, in the Life in Months field, is entered as a read-only field defaulted automatically based on the depreciation method you choose.
By default, the salvage value is determined from the residual value you entered. If you want to update the defaulted value, select a basis. If you select Percentage, enter a salvage value percent rate of the depreciable cost. If you select Amount, enter the salvage value amount.
In the Salvage Value field, enter the percentage rate or amount. Use the Asset Tax Depreciation section to setup the asset books you will use for tax depreciation. You are required to set up at least one tax book if your financial product has the Tax Owner quality of Lessor. You can set up one or more tax books as long as the tax books are associated in Oracle Assets to the asset corporate book you selected. In the Asset Tax Depreciation section, a table provides one row each for multiple tax books.
In the Tax Book field, select the tax book you want to use for this asset depreciation from the list of values. The Cost, Method and Life in Months are defaulted. Method and Life are derived from the setups for these fields in Oracle Assets based on the asset category.
Enter the depreciable tax cost if there is no default value or if you want to update the default value.
Select the depreciation Method if there is no default or if you want to use a different method. The method you use determines the asset's depreciable tax life for the selected tax book. The Method field is defaulted based on the asset category and tax book you selected.
The Life in Months field is automatically populated depending on the tax book method you selected. You cannot update it.
To enter additional tax books, click Add Another Row and repeat steps 8-11.
After you have entered all of the required and optional information you need to create the asset, click the Apply button to save your work and return to the Configuration summary page.
If you have existing asset lines, you can copy an asset line to create a new one.
Perform the following steps:
Search for the asset to duplicate in the Configuration page asset section.
Select the row or rows of the assets you want to duplicate. Click the Duplicate button. The application automatically creates a new asset and assigns a default asset number.
To update or view the new asset, search for the asset by clicking the Go button in the search criteria section.
Click the Asset Number hyperlink of the new asset to open the record and edit it.
Prior to activating a contract, you can remove an asset line that you want to discard. Once you remove the asset line, you cannot search for it or view it.
Perform the following steps:
Search for the asset to remove in the Configuration page asset section.
Select the row or rows of the assets you want to remove. Click the Remove button. A confirmation message alerts you that the selected assets have been removed.
After you have set up an asset line, you can view the general asset information you entered or enter additional information for the asset from the Asset Details page. To view or update the general asset information, use the General tab and click the Update button to modify any details. You can also enter or update additional asset line details that include:
Addons
Billing
Adjustments
Serial Number
Supplier Invoice
Taxes and Filing
To view or enter the asset line details, you start from the Asset Details page. You access the Asset Details page by clicking on the Asset Number hyperlink from the asset summary section of the Configuration sub-tab on the Contract Details page. Each section has a separate sub-tab that you can view or update from the Asset Details page. To return to the Configuration page and asset summary, you click on the Return to Configuration hyperlink at the bottom of the Asset Details page.
The Asset Details icon displays the asset details to track events on fixed assets post booking.
The following steps require that you select an asset line and all values you enter from an Asset Details sub-tab are applied to the asset you select. You can update asset values two ways. You can click on the asset number hyperlink in the asset summary and then click the sub-tab of the details section you want to view or update. Alternatively, if you want to go directly to the update page, you can select the details section you want to update from the drop down list on the asset line and click the Go button. If you want to view serial numbers only, you can click the Serial Number icon for the asset to go directly to the list of asset serial numbers. Only assets with serial numbers have an enabled Serial Numbers icon.
See: Setting Up Serial Number Control, Oracle Inventory User's Guide
Note: You cannot enter asset adjustments from the Asset Adjustments sub-tab. In this sub-tab you can view adjustments created for an asset using the Contract Adjustments sub-tab.
Ensure that you have set up the following:
Items for add-ons
Suppliers and lease vendor parties for the asset or add-Ons, including pay sites and payment methods
Subsidies
Payment stream types
Evergreen rent stream types and formulas
Billing sites for asset level billings
From the asset details General sub-tab, you can update information you entered when you created the asset and enter a payment for the asset line.
Note: You have two options for entering asset payments. You can enter a payment for an individual asset from the General sub-tab. Alternatively, you can enter a single payment in the contract Payments sub-tab and apply the payment proportionally to all assets you entered for the contract.
Steps
To update asset general details or enter asset line payments perform the following steps:
Search and select the applicable asset in the Asset summary table in the Configuration sub-tab for a contract.
In the Update column, select Asset Details and click Go. The Asset Details page appears. Alternatively, select the asset number hyperlink and click Update from the General tab.
Note: From the update page, you can update any details you entered when you created the asset. See section Create Asset from above.
To enter a payment for the asset, click the Create button in the Payment section. Click Apply to save your payment and return to the asset General sub-tab.
Once you have completed your asset details updates and payments, click the Apply button to save your work and return to the asset details page. Click on another sub-tab to continue entering asset details or click on the Return to Configuration hyperlink to return to the asset summary section of the contract Configuration sub-tab.
You can associate related equipment items to your primary asset as asset Add-Ons. These add-ons increase the value of your asset cost and residual value and are fundable. The add-on items are added to each unit of your asset and are funded to the supplier of the asset unless you specify a different supplier by entering a supplier invoice for the add-on. The total cost of any fixed asset created in Oracle Assets includes the add-on value. Add-ons cannot carry serial numbers.
To enter add-ons for the asset:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
In the Update column, select Addon and click Go. Alternatively, select the asset number hyperlink, navigate to the Add-Ons sub-tab and click Update.
In the Add-On summary table, click Add Another Row.
Select the inventory item that you want to add to the asset line.
Enter a unit cost for the item.
Repeat steps 3-4 for each item you want to add to the asset line.
Apply.
Note: Once you enter the add-on items, you can enter additional add-on details from the add-on summary table.
To enter additional description details, click on the Details icon in the add-on summary table. You can enter Manufacturer, Model, Year of Manufacture and Notes. Click Apply to save your work and return to the add-on summary table.
To enter a supplier invoice for the add-on, click the icon in the Supplier Invoice column. You must select a supplier to save the supplier invoice details. You can also enter the invoice number, invoice date and ship to site if it is different from the asset location. The list of suppliers you can select from is limited to the Lease Vendor parties you have set up for your contract in the Parties sub-tab.
If you want to remove an add-on item from an asset line, then select the Remove icon on the add-on row. Once you have entered all of your add-ons, click Apply to save your work and return to the add-on summary table.
To update an add-on, click the Update button to return to the add-on update table. To view the add-on details, click the add-on item description hyperlink. Once you have completed entering or updating your add-ons, click on another Asset Details sub-tab to continue entering or updating asset details, otherwise, you can click on the Return to Configuration hyperlink to return to the asset summary table in the Configuration sub-tab of the contract.
If you want to bill payments for an asset to a different customer address than the contract, you must setup that information in the Billing sub-tab for an asset. You can also enter the details of any agreement you have to pass-through, or share, evergreen rentals with vendors in the event that the asset continues billing rental payments after the original end of term.
To enter billing details for the asset, perform the following steps:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
In the Update column, select Billing and click Go. Alternatively, select the Asset Number hyperlink, navigate to the Billing sub-tab, and click Update.
Select the customer billing address to which invoices for this asset are sent.
Select the customer's payment method for this asset.
Select the customer bank account from which payments are drawn. Note: This is optional and only used if payments are drawn directly from the customer's account. The bank name appears after you select the bank account.
Evergreen Pass-Through (Sharing)
Perform the following steps if you have agreed to share evergreen rentals with one or more vendors:
In the Evergreen section, select the payout basis.
Select the date on which evergreen pass-through (sharing) is to begin.
Select the evergreen formula used to calculate the amount of evergreen rental to share with the vendor.
Select the pass through stream type that will be used on the pass-through payment invoice made to the vendor. The stream type you select will also be associated to the accounting event for the payable invoice and can be used to configure your evergreen sharing accounting entries.
You can share the evergreen rental with one or more vendors. To add a vendor for sharing, click the Create button from the vendor summary table. From the Create Vendor page, select a vendor party. You can only select a vendor that is associated to the contract as a Lease Vendor party in the contract Parties sub-tab. You can also enter the payment details for making payments to the vendor, including pay site, payment method and payment terms. Click Apply to save the vendor and return to the Billing sub-tab of the asset.
To update the payment details for the vendor you will share evergreen rentals with, click the icon in the Update column of the vendor row.
To remove the vendor, click the Remove button.
Once you have entered all of the asset billing details and evergreen sharing details for each vendor, click Apply to save your work and return to the Billing sub-tab details page. You can select another asset sub-tab to continue entering asset information or return to the asset summary of the Configuration contract sub-tab by clicking on the Return to Configuration hyperlink at the bottom of the page.
To view adjustments you entered for assets from the Contract Adjustments sub-tab, perform the following steps:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
Note: You cannot select the adjustment section for an asset from the Update column drop down list since you cannot update adjustments from the asset Adjustments sub-tab. To update any asset adjustments, go to the Adjustments sub-tab from the contract details page.
Any down-payment, trade-in, capitalized fees or subsidies you entered for the asset is displayed in a summary table for the asset. The amount shown for the adjustment is the amount that applies to the asset and not the full adjustment amount.
You can select another asset sub-tab to continue entering asset information or return to the asset summary of the Configuration contract sub-tab by clicking on the Return to Configuration hyperlink at the bottom of the page.
To specify a vendor to fund for the cost of the asset and related supplier invoice details, you enter supplier invoice details in the Supplier Invoice sub-tab. You must enter a supplier before you can select the vendor for any asset funding. You can only enter one supplier invoice for the asset. Asset add-ons can have a separate supplier invoice.
Perform the following steps:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
In the Update column, select Supplier Invoice and click Go. Alternatively, select the Asset Number hyperlink, navigate to the Supplier Invoice sub-tab, and click Update.
Select the vendor for the invoice.
Note: You can only select from vendors set up in the Parties section of the contract with the role of Lease Vendor associated to this contract.
Enter the supplier invoice number.
Enter the date of the supplier invoice.
In the Ship to Site field, choose the ship to address that is to appear on the supplier invoice.
Note: You can only select from the customer's existing shipping addresses.
Click Apply to save your work and return to the Supplier Invoice sub-tab.
Note: The application does not sent the invoice information entered above to Oracle Payables as a funding request.
You can select another asset sub-tab to continue entering asset information or return to the asset summary of the Configuration contract sub-tab by clicking on the Return to Configuration hyperlink at the bottom of the page.
You can enter the serial numbers for each unit for the asset line. You can only enter serial numbers for assets with inventory items set up as serialized in the item master setup in Oracle Inventory. For more information on setting up items in inventory, see Define Items, Oracle Lease Management Implementation Guide .
To enter serial numbers for the asset, perform the following:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page. Select the Serial Numbers icon for the asset.
You can also access the serial number page by selecting Serial Numbers in the drop down list in the Update column for an asset and clicking Go. Alternatively, select the Asset Number hyperlink, navigate to the Serial Number sub-tab and click Update.
In the Serial Number table, you can enter the serial number for each asset unit. The application displays the installed address of each asset.
To add more rows, click the Add Another Row button. You must enter a serial number for each asset unit if the asset’s inventory item is enabled for serial number tracking.
To remove serial numbers, select the rows you want to remove and click the Remove button on the table.
Click Apply to save your work and return to the Serial Numbers sub-tab for the asset.
Note: Serial numbers must be unique for an asset. If you enter a serial number that has already been used for another asset, you must modify the serial number before you can book a contract.
You can select another asset sub-tab to continue entering asset information or return to the asset summary of the Configuration contract sub-tab by clicking on the Return to Configuration hyperlink at the bottom of the page.
You can set up transaction tax, property tax and filing details for a contract in the contract Terms and Conditions for Taxes and Filings. If you want to set up different values for an individual asset, you enter those details on the asset Taxes and Filing sub-tab. The values you enter for an asset will be used and not the values you entered for the contract.
If you want to set up details for tax calculations that are different for an asset than for other assets on the contract, enter the values in the Asset Tax section.
Steps
Perform the following steps:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
In the Update column, select Taxes and Filing Invoice and click Go. Alternatively, select the asset number hyperlink, navigate to the Taxes and Filing sub-tab and click Update.
Some of the values in the Asset Tax section have the same meaning as the values you enter for a contract except that they apply only to the asset. The meaning of the items marked below as Refer to Contract Terms can be found in the Contract Terms and Conditions for Taxes and Duties.
Click Apply to save your work or enter additional information for Asset Filings on this page.
The following table describes the fields in the Asset Tax section:
| Field | Description |
|---|---|
| Update from Contract | Enabled check box indicates that the asset values you entered will be updated from the contract values if you update the values in the Contract Taxes and Duties T and Cs. |
| (Transaction Tax) Exempt Number | Record the exemption certificate number if the asset is exempt from any transactional taxes. |
| Transfer of Title | Refer to Contract Terms |
| Sale and Lease Back | Refer to Contract Terms |
| Purchase of Lease | Refer to Contract Terms |
| Intended Use for Tax | Refer to Contract Terms. |
| Age of Equipment | Refer to Contract Terms. |
| Asset Upfront Tax | Refer to Contract Terms. |
| Property Tax Applicable | Refer to Contract Terms. |
| Lessee To Report | Refer to Contract Terms. |
| Bill Tax | Refer to Contract Terms. |
| (Use Tax) Exempt | Enabled check box indicates that the asset is not subject to any use-type transaction taxes. |
| Exempt Number | Enter the number of the tax exemption certificate. |
| Override | An enabled check box indicates that you want to use an override rate for charging use tax rather than any rate calculated by the tax engine. |
| Override Rate | If you decide to use an override for charging use taxes, enter the override rate. |
| Estimated Tax | Estimated tax at the beginning of the contract. |
If you want to record lien and registration filings for an individual asset that are different than other assets on the contract, enter the details in the Asset Filing section.
Perform the following steps:
Search and select the applicable asset in the asset summary section of the Configuration tab of the Contract Details page.
In the Update column, select Taxes and Filing Invoice and click Go. Alternatively, select the Asset Number hyperlink, navigate to the Taxes and Filing sub-tab, and click Update.
All of the values in the Asset Filing section have the same meaning as the values you enter for a contract except that they apply only to the asset.
Click Apply to save your work and return to the asset details page.
You can select another asset sub-tab to continue entering asset information or return to the asset summary of the Configuration contract sub-tab by clicking on the Return to Configuration hyperlink at the bottom of the page.
If the contract is for financing real estate and is classified as a loan, the Asset Summary page displays the Create Real Estate button. You can enter details specific to a real estate asset.
Note: The Create Real Estate button is available only if the deal is classified as a loan. You need to set up real estate items in your inventory item masters for creating real estate type assets on your contracts. See the appropriate section of the Oracle Leasing and Finance Management Implementation Guide for setting up inventory items. You also need to insure the property site is set up as an installed site address for your customer party. See the section for setting up customer installed sites in the Oracle Leasing and Finance Management Implementation Guide.
Perform the following steps to create a real estate asset:
From the asset summary section of the Configuration sub-tab on the Contract Details page, select Real Estate Asset from the drop down list in the Create section and click Go.
In the Item field, select the inventory item code for the property from the list of values.
Enter the asset number.
Enter a short description of the property.
Enter the weighted average life of the property.
Enter the year the property was originally built.
Choose the address of the property from the list of values.
Financial
Enter the initial direct costs of originating the loan for this property. These costs are not automatically processed or fundable. The information is for your reference is setting the asset cost.
Enter the target bond equivalent yield for the loan on this property. The rate will not be used to generate or calculate payments. You must enter payments directly for the asset line in the Payments sub-tab for a contract.
Enter the total amount of the loan in the Financed Amount field.
Select the Credit Tenant check box if there is a credit tenant.
Select the Government Building Secured check box if the property is a secured government building.
Enter the percentage of the rentable space occupied at origination in the Occupancy Ratio field.
Enter the ratio of rent cash flow to loan payment amount at origination in the Coverage Ratio field.
Enter the amount of rent cash flow at origination in the Property Rent field.
Inspection
Enter the date of the last property inspection.
Enter the date the next property inspection is due. The inspection will not be generated automatically. This information is for your information only.
Appraisal
Select the property collateral class from the list of values.
Select the appraiser conducting the property appraisal from the list of values.
Enter the appraisal date.
Enter the appraised value of the property.
Square Footage
Enter the property's gross square footage in the Gross field.
Enter the property's rentable square footage in the Net Rentable field.
Commitment Letter
Enter the date a commitment letter was accepted.
Enter the date a commitment letter expires.
Click Apply to save your work and return to the asset summary on the Configuration tab.
Financed fees are funded fees that are financed. A financed fee is similar to a loan. When time elapses between funding for a fee cost and the lessee making a full payment for that fee, the lessor has, by definition, created a loan to the lessee. The lessor may account for the financed fee in the contract's yield calculation and can generate streams for amortization schedule and income accrual.
Rollover fees are funded fees on the Lessee's contract for the financing of a Rollover Termination Quote on a contract. Rollover amounts on a Rollover Termination Quote can be financed on a new lease quote or contract. You can set up streams to be generated similar to a financed fee.
To create financed and rollover fee types:
Select the applicable in the Create Fee field in the Financing section of the Configuration subtab. The Create Fee page appears.
For the Financed Fee type, select the fee.
Select the supplier, if the fee is associated with a particular supplier. A supplier must be selected if some portion of the fee will be passed through to the supplier.
Specify the period during which the fee is effective.
Enter the total amount of fee for the asset.
Enter the number of periods during which the asset is financed.
Enter the amount per period.
Enter the applicable frequency.
Enter applicable additional information. See Additional Contract Data.
Click Apply.
For the Rollover Fee type, select the fee.
Specify the period during which the fee is effective.
Select the applicable rollover quote for the fee.
Note: The application displays the contract number and rollover fee amount.
Oracle Leasing and Finance Management enables you to enter adjustments for the assets on a contract that increase or reduce the financed amount of the assets. You can enter the following adjustment types:
Capitalized Expenses
Down Payment
Subsidy
Trade-in
All adjustments must be associated to one or more asset lines. Although you can view the adjustments associated to a particular assets from the Adjustments sub-tab on the Asset Details page, you must enter adjustments and associate them to assets from the Adjustments sub-tab of the Contract Details page.
Perform the following steps in the Adjustment subtab on the Contract details page.
To adjust capitalized expenses:
Select Capitalized Expenses in the Create field and click Go. The Create Fee page opens.
Select the fee for which you want to make adjustments.
Enter the amount of the fee to be applied to each asset. If the fee is to be spread between several assets, then enter the amount for the first asset and repeat the process for the other assets.
Select the supplier of the applicable asset.
Enter the period during which the adjustment is applicable.
Enter applicable additional information for the adjustment. See: Additional Contract Data.
To adjust down payment:
Select Down Payment in the Create field and click Go. The Create Down Payment page opens.
Select the method of down payment in the Basis field.
Enter the down payment percent.
In the Associated Assets section, click Add Assets to select assets for down payment.
Select the basis, amount, and the down payment amount received.
Click Apply.
To adjust subsidy:
Select Subsidy in the Create field and click Go. The Create Subsidy page opens.
Select the subsidy that you want to adjust.
In the Subsidized Assets section, click Add Assets to select and apply the subsidy to the selected assets.
To adjust trade-ins:
Select Trade-ins in the Create field and click Go. The Create Trade-in page opens.
Select the date of the trade-in adjustment.
Enter a description of the adjustment.
Enter the amount of any trade-in applied to the capital amount.
In the Associated Assets section, click Add Assets to apply the trade-in adjustment to the selected assets.
Select the applicable asset and enter the trade-in adjustment amount.
Click Apply.
Meet the following prerequisites:
Stream types – You must set up stream types that you use for capitalized expense fees and for payments that you will associate with trade-ins, subsidies and down payments.
Note: Note that Capitalized Down Payments setup with the Capitalized Flag = YES cannot be created on contracts when the Tax Owner is the Lessor on the Financial Product. Also, you cannot book contracts using External Stream Generation when a Capitalized Down Payment is setup with the Capitalized Flag = YES.
Subsidies – You must set up subsidies you want to use for associating and calculating subsidy adjustments.
Note: Subsidy pools – you can track the use of a subsidy across contracts and customers by setting up a subsidy pool for a vendor who supplies subsidies on your contracts.
See: Set Up Subsidies, Oracle Lease Management Implementation Guide
Perform the following steps in the Adjustment sub-tab of the Contract Details page. Unless you set up a trade-in, down payment or subsidy for accrual or otherwise indicate it is not capitalized, adjustments are added to the cost of the asset for the following purposes:
Any asset created in Oracle Assets: If the asset depreciates based on the book class and tax owner associated to your contract’s financial product, the depreciable basis will include the adjustments unless you change or update the depreciable cost of the asset.
Asset principal opening balances: Opening balances used to calculate amortization schedules include capitalized adjustments.
Other adjustment calculations based upon asset cost: Calculations for down payments, subsidies and trade-ins include all other adjustments.
Rates: The payments you apply to asset lines will pay off the asset cost including the effect of the adjustments. Contract interest rates include the pay-off of capitalized expenses in the interest calculations.
Seeded capital cost formulas: Any formula you use based on total capital asset cost will include adjustments. Capitalized expenses increase the asset capital cost. Subsidies set up as capitalized basis will reduce the asset cost. Down payments and trade-ins you set as Capitalized will reduce the asset cost.
Capitalized Expenses
To create a capitalized expense fee:
Select Capitalized Expenses in the Create field drop down list and click Go. The Create Fee page opens.
Select the stream type that represents the fee you want to add to your assets. Only stream types associated to the stream generation template for your financial product with the stream purpose of Expense and the Capitalized flag set to “Yes” on the stream type definition are available for you to select.
Enter the total amount of the fee. If the fee is to be spread between several assets, then enter the total amount for all assets. You will be able to allocate the fee amount to the assets later.
Select the supplier of the fee. The list of values is limited to the Lease Vendor parties you set up for the contract in the Parties tab. This is the supplier you want to fund for the expense amount you enter.
Enter the Effective To date for the fee. This defines the ending period the fee expense covers. The Effective From date defaults to the contract start date. You will only be able to associate this fee to assets that start on the same date. Capitalized fees can only start on the same date as asset starts on the contract.
Enter applicable additional information for the fee line. See: Additional Contract Data for how to set up and enable descriptive flex fields for contract fee lines.
Click Apply to save your work. You must complete the capitalized expense by associating the fee line to an asset before you can book (activate) the contract.
Navigate to the Adjustments sub-tab from the contract details page. Select the icon in the Update column of the row for the capitalized expense from the list of adjustments.
Alternatively, you can select the Add Assets button. You search for the assets you want to add, select one or more assets by clicking the Select check box and then click the Select button. The assets you selected appear in the Associated Assets table. You must enter the amount of the expense that you want to allocate to each asset. The total amount must match the total amount of the capitalized expense you entered.
To remove an associated asset, select one or more asset rows and click the Remove button.
Click Apply to save and return to the Adjustments sub-tab.
To remove a capitalized fee, you can click on the icon in the Remove column in the Adjustments summary table.
Down Payments
You can only create one down payment per asset on your contract. To create a down payment and associate it to assets:
Select Down Payment in the Create field drop down list and click Go. The Create Down Payment page opens.
Select the method of down payment in the Basis field. You can enter a rate as Percentage of Asset Cost and the down payment amount will be calculated for you when you select assets or you can select Fixed to enter your own amount.
Enter the down payment percent if the basis was Percentage of Asset Cost or the Fixed amount.
Alternatively, in the Associated Assets section, click Add Assets to select assets for down payment. You must select the specific assets you want to associate with the down payment and enter the amount.
In the Associated Assets table, you must decide how you want to handle the down payment for each asset. In addition to updating the amount and calculation basis, you select whether the down payment amount is capitalized. Select Yes or No. If you select Yes, the amount will be added to the principal balance (for loans) or capital cost (for assets).
Select the Receiver of the down payment. The receiver is the party, either the Lessor or the Vendor, who receives the cash payment from the Lessee party.
Click Apply to save your work and return to the Adjustment sub-tab.
To remove an asset that you do not want associated to this down payment, click the select the asset row and click Remove button.
Note: If you set the Capitalize value to No, then you must select Lessor as Receiver and set up a payment type of Down Payment for the associated assets to book (activate) the contract. You can only select Receiver of Vendor when you set the Capitalize field to Yes. In order to set up a payment type of Down Payment, you must add stream types with the purpose of Down Payment to the stream generation templates associated with the contract’s financial product. See the Oracle Leasing and Finance Management Implementation Guide for more information on setting up payment stream types.
Subsidies
To create a subsidy and associate to assets:
Select Subsidy in the Create field and click Go. The Create Subsidy page opens.
Select the subsidy that you want to add to your assets.
You must apply each subsidy to one or more assets. In the subsidized assets section, click Add Assets button. Select the asset or assets to which you want to apply the subsidy. Only assets that are eligible and meet the criteria for the subsidy are displayed.
In the Subsidized Assets table, you can enter an override amount for each subsidized asset. To see the subsidy amount calculated automatically for each asset, you must complete the process to create a subsidy and view the total on the Adjustment summary table.
Select a party for each subsidized asset. The list of values is limited to the parties you set up as Lease Vendors in the Parties tab of the contract.
If your subsidy has the option for a refund on early termination of a subsidized asset, you can enter information for refunding the subsidy vendor selected by clicking the icon in the Party Refund Details column. If you do not enter customer account details for the subsidized asset, any refund credit will be issued to the vendor’s customer account defined in the contract party record under Billing Details.
Click Apply to save your work and return to the Adjustments sub-tab.
To remove a subsidized asset, select the asset row and click the Remove button.
Note: You must set up subsidies before you can add them to a contract. The attributes you set up on a subsidy determine whether the subsidy can apply to the assets on your contract, how to calculate the amount and how to process and account for the subsidy. You cannot select a subsidy for an asset under the following conditions:
The subsidy has applicability criteria that exclude the assets on the contract that you want to associate.
The subsidy has expired as of the asset line start date.
Trade-Ins
To adjust trade-ins:
Select Trade-ins in the Create field and click Go. The Create Trade-in page opens.
Select the date of the trade-in adjustment.
Enter a description of the adjustment.
Enter the amount of any trade-in applied to the capital amount of your assets.
Alternatively, in the Associated Assets section, click Add Assets to select assets for trade-in. You select the specific assets you want to associate with the trade-in and enter the amount of the trade-in for each asset.
To remove an asset from association to a trade-in, select one or more assets and click Remove.
Click Apply to save your work and return to the Adjustments sub-tab. After you have entered all adjustments, you can select another contract sub-tab to continue entering contract information.
Oracle Leasing and Finance Management enables you to specify additional charges in the contract. You can create contract lines for fees, services, usage or insurance charges. You can set up payments for collecting additional charges as well as any associated expenses.
During contract authoring you select a fee type to define fee terms. The fee type you select determines the fee attributes you are required to enter and ensures that payment and expense details are entered for a fee when required. After you select fee types, Leasing and Finance Management renders the appropriate page for a particular fee type so that you can define fee attributes.
When you set up fee lines on a contract and select a fee type, you must select a primary stream type to define the fee line. The stream type is used to determine the types of streams generated for a fee and describes the fee when you see it in the summary list. You can only select stream types with a purpose that match the fee type you are entering. For example, if you are entering an Expense type fee, then you can only choose stream types with a purpose of Expense. The stream types must also be associated to the stream generation template associated to your contract’s financial product. This insures that the stream types you use on fees are set up for appropriate stream generation and accounting.
See: Define Streams and Pricing, Oracle Lease Management Implementation Guide
Leasing and Finance Management seeds the following fee types:
Absorbed
Expense
Financed
Income
Miscellaneous
Pass-Through
Security Deposit
A fee contract line has the following attributes:
Additional Charge Type indicates the fee type.
Payment required indicates if a fee type requires that you associate a payment to the fee contract line.
Payment Stream Type Purpose: Indicates the purpose of the stream types you can use for setting up payments related to the fee line.
Funding Allowed: Indicates when you can set up expenses for a fee line which allows you to pay (fund) a supplier for the expense.
Initial Direct Cost: For fee types with Expenses allowed, indicates if you can designate any part of the expense as an initial direct cost and accrue it separately from the rest of the non-IDC expense.
Line Stream Type Purpose: Indicates the purpose of the stream types you can use for setting up the fee lines on the contract.
Included in Yield: Indicates if the cash flows associated with the payments or expenses associated to the fee are included in the contract yield calculation.
The following table provides an overview of the attributes you use to define a fee contract line. If you do not enter all required attributes or optional attributes that are not allowed, then you will receive errors or warnings during contract validation and must correct any errors before you can complete contract activation.
| Additional Charge Type | Payment Required | Payment Stream Type Purpose | Funding Allowed (set up Expense with Supplier) | Initial Direct Cost (IDC) Allowed | Line Stream Type Purpose | Included in Yield |
|---|---|---|---|---|---|---|
| Absorbed | No | Not Applicable | No | 100% required | Expense | Yes |
| Expense | No | Not Applicable | Yes | 0%-100% | Expense | Yes |
| Income | Yes | Fee Payment | No | No | Not Applicable | Yes |
| Miscellaneous | Yes | Fee Payment | Yes | 0%-100% | Expense | Yes (both payment and expense) |
| Pass-through | Yes | Fee Payment Pass Through Fee Renewal - Automatically assigned to billed payments during evergreen if fee enabled for evergreen period |
No | No | Pass Through Fee | Yes (both payment and payout) |
Three other fee types, capitalized, financed, and rollover fees, are not entered as additional charges because they are either entered as an adjustment or financed, meaning they contribute to the interest or rental income for a contract. You enter capitalized fees in the Asset Adjustments sub-tab and associate assets in the Contract Adjustments sub-tab. You enter Financed and Rollover fees in the Configuration sub-tab. See appropriate section on configuration for more information on entering or updating Financed and Rollover fee types. These three fee types can be associated to assets so that they can be partially terminated if the associated asset is terminated from a contract.
Leasing and Finance Management exclusively uses general fees for upgrade purposes. If fees were entered prior to the introduction of Fee Types on version 11i10, some fees may have been automatically assigned the type of General. General fees cannot be created or updated on existing contracts.
Leasing and Finance Management generates streams based on the fee types selected, the stream types you selected when you defined the fee and the dependent stream types you associated to the streams you used on the fee line. The following table shows the steam type attributes for selected fee types. You have other stream generation options when you use external type stream generation for contract pricing. For more information on setting up stream generation templates, configuring them for stream generation, and associating them to your financial products see Stream Generation Template, Oracle Lease Management Implementation Guide.
A primary stream type is a stream type you select when you set up a fee line or a stream you define once on the stream generation template that is used automatically when needed to generate a stream. Dependent streams are optional stream types you set up to generate streams for accounting accrual purposes.
The following table shows the steam type attributes for selected fee types.
| Fee Type | Payment Stream Type Purpose (Primary) | Income Accrual Stream Type Purpose (Dependent) | Line Stream Type Purpose (Primary) | Expense Accrual Stream Type Purpose (Dependent) |
|---|---|---|---|---|
| Absorbed | Not Applicable | Not Applicable | Expense | Amortized Fee Expense (for IDC) |
| Expense | Not Applicable | Not Applicable | Expense | Accrued Fee Expense Amortized Fee Expense (for IDC portion) |
| Income | Fee Payment | Amortized Fee Income Accrued Fee Income |
Not Applicable | Not Applicable |
| Miscellaneous | Fee Payment | Amortized Fee Income Accrued Fee Income |
Primary: Expense | Accrued Fee Expense Amortized Fee Expense (for IDC portion) |
| Pass-through | Fee Payment Pass Through Fee Renewal - Automatically assigned for invoices in evergreen period |
Pass Through Revenue Accrual | Pass Through Fee | Pass Through Expense Accrual |
Once all the fee types required for a contract have been authored, you can view the fee streams from the Summary subtab of the Contract Details page. Once you have generated streams, you can click on the Details icon in the activation checklist for Stream Generation row.
Perform the following in the Streams section:
Select Service or Fee Streams in the Stream Level field and click Go to view the stream details.
Select a specific fee to view the streams only for that fee line.
Leasing and Finance Management allows you to import contracts with fee types. Leasing and Finance Management also reports errors if all mandatory attributes for a selected fee type are not imported for a fee.
Before you create fee lines, you must meet the following prerequisites:
Fee and expense stream types must be set up. To set up fee and expense stream types, see Set Up Fee and Expense Stream Types, Oracle Leasing and Finance Management Implementation Guide.
Accounting templates for stream types must be set up. To set up accounting templates for fee stream types, see Define Accounting Templates, Oracle Leasing and Finance Management Implementation Guide.
If suppliers are associated with the fees, then you must create lease vendor parties in the contract Parties sub tab and their accounts and payment details.
Perform the following steps in the Additional Charges sub-tab to create fees for a contract:
In the Fees and Services section, select the fee type in the Create field and click Go. The Create Fee page opens.
Enter details as required for the fee type selected.
Click Apply to save your work and return to the Additional Charges summary page.
If you created a pass through fee type, you must update the line to specify payout vendors. Click the Update icon in the fee row. In the update page, a table is displayed for you to add the vendors that will receive payouts for the pass through fee.
Once a vendor is added, you can open the vendor record and update the pass through details for each vendor.
For fees that require payments, you can click the Update icon for the row you created and enter a payment for the fee line in the fee update page. Alternatively, you can enter a payment for any fee line from the Payments sub-tab for a contract.
To remove a fee, select the icon for the Remove column in the fee row.
To update an existing fee line, click the icon in the Update column in the fee row.
The following table displays attributes for various fee types:
M = Mandatory; O = Optional; N = Not Required
| Attribute | Absorbed | Expense | Miscellaneous | Income | Security Deposit | Pass Through |
|---|---|---|---|---|---|---|
| Fee (stream type) | M | M | M | M | M | M |
| Effective From (defaults from Contract Start Date) | M | M | M | M | M | M |
| Effective To (defaults from Contract End Date) | M | M | M | M | M | M |
| Amount | M | M | M | M | M | M |
| Number of Periods | O | O | O | N | N | N |
| Amount per Period | O | O | O | N | N | N |
| Frequency | O | O | O | N | N | N |
| Supplier | O | O | O | N | N | N |
| IDC | O | O | O | N | N | N |
| Payment Attributes (type, amount, num of periods, etc.) | N | N | M | M | M | M |
Pass Through Fee lines have additional attributes you can setup because you can create payouts to multiple vendors. You perform the following steps to complete a pass through fee:
Create the fee line.
Update the fee line to add one or more vendors to payout.
Update the fee line vendors to set up pass through payout terms for each vendor for base term.
Update the fee line vendors to set up pass through payout terms for each vendor for evergreen term.
To create a pass through fee type, perform the following steps:
In the Fees and Services summary of the Additional Charges tab, select Passthrough in the Create field and click Go. The Create Fee page opens.
Enter the fee fields based on the descriptions for the fields in the following table.
Click Apply to save your work and return to the Fee and Service summary.
You must update the fee to add vendors and vendor rules in order to complete the fee prior to contract booking (activation).
The following table describes the fields for creating pass through fee type:
| Term | Description | Required for Base Term | Required for Evergreen Term |
|---|---|---|---|
| Payout Basis | Determines the basis on which payouts dates and amounts are calculated. Billing – Payout date is the date an invoice is billed. Payout amount calculated on invoiced amount. Due Date – Payout date is the due date of the invoice generated. Payout amount calculated on invoiced amount. Partial Receipt – Payout date is the date of any partial or full receipt. Payout amount calculated on receipt amount. Full Receipt – Payout date is the date of full receipt. Payout amount calculated on full receipt amount. |
Y | Y |
| Effective From | The date payouts are to begin for any vendor. | Y | N |
| Formula | Defines the payout amount for the evergreen period if fees are billed and shared during evergreen period. | N | Optional |
| Stream Type | The stream type associated with payouts during the evergreen period if fees are billed and shared during evergreen period. | N (Derived from Fee Line) | Optional |
After you create the pass through fee, you enter the vendors to whom you want to make payouts. Perform the following steps to add vendors:
Select the icon in the update column for the pass through fee row in the Fee and Services summary table.
From the update page, select Create in the vendor summary table.
Select a vendor for the pass through fee from the list of values. Only parties with the role Lease Vendor defined on the contract Parties tab are shown.
Click Apply to save the vendor and return to the pass through fee update page Vendor summary.
Repeat steps 2-4 for each vendor to whom you want to make payouts to for this fee.
After adding vendors, you must set up terms you want to use to schedule or consolidate payouts. You will enter the same terms for both the base term and the evergreen term for a vendor. Perform the following steps to complete the set up of vendor terms for a pass through fee:
Select the Update for the vendor from the vendor summary table in the pass through fee update page.
Enter the fields for base term.
Click Apply to save your work and return to the vendor summary page.
Perform steps 1-2 for each vendor.
From the vendor summary page, you can expand the vendor node to view rows for the base term and the evergreen term pass through details. Click the Update icon or the Remove icon to edit or remove the details from the fee line.
Note: In addition to the terms you set up for a pass through fee, you can also set up consolidation rules for a vendor using Vendor Disbursement Terms. This allows two methods for consolidating and scheduling pass through payouts. Insure you are aware of any Vendor Disbursement Terms that may impact the final schedule of payouts for passthrough fees when you setup the pass through vendor terms on the fee for a contract.
Passthrough payouts to vendors could exceed the fee value if you elect to payout to vendors based on cash receipts and you allow cash receipts to be over-applied to invoices. For the transaction types of Invoice-OKL, Credit Memo-OKL, or Investor-OKL, an Over-application Allowed check box appears in Receivables. This check box enables over-application of funds to invoices. Leasing and Finance Management does not support over-application of funds to invoices, and this check box should not be selected.
The following table describes the Passthrough payouts to vendors:
| Term | Description |
|---|---|
| Pay Group | (Optional) Assigns a group to vendor payouts for use in grouping payments for processing in Oracle Payables. |
| Payment Terms | Determines the date invoices become payable in Oracle Payables. |
| Payment Basis | Determines the date payouts are processed in Leasing and Finance Management for creating payable invoices. Processing Date – Payouts are dated on processing date (date programs are run) after they become eligible for payout based on the Pass Through Payout Basis. Schedule – Payouts are grouped together based on a schedule determined by the Pay Start Date, Frequency and Remittance Days after they become eligible for payout based on the Pass Through Payout Basis. Source Date – Payouts are dated on the date they become eligible for payout based on the Pass Through Payout Basis. |
| Pay Start Date | The date payouts begin for the specified vendor. |
| Payment Method | The format of payment to use when processing payments in Oracle Payables. |
| Payment Frequency | If the Payment Basis is Scheduled, determines the frequency that payouts are grouped for creating a payable invoice. |
| Remittance Days | If the Payment Basis is Scheduled, determines the actual payable invoice date for a group of payouts by adding remittance days to the date payouts are processed. |
| Disbursement Basis | Determines the basis on which a payout amount for a vendor is calculated. Fixed – the fixed amount is paid each time the payout basis occurs for the fee line. Percent – the percentage of the fee payment paid each time the payout basis occurs for the fee line. |
| Disbursement Fixed Amount | If Disbursement Basis is Fixed, enter the fixed amount. |
| Disbursement Percent | If Disbursement Basis is Percent, enter the percentage. |
| Processing Fee Basis | Determines the basis on which any processing fee is calculated and withheld from the payout. Fixed – the fixed amount is deduced each time the payout basis occurs for the fee line. |
| Processing Fee Fixed Amount | If Processing Fee Basis is Fixed, enter the fixed amount. |
| Processing Fee Percent | If Processing Fee Basis is Percent, enter the percentage. |
If you plan to provide for or bill for any services within the terms of the contract, you must set up service lines.
You can create two types of service line:
Standard: You enter all the service details in Oracle Leasing and Finance Management. Leasing and Finance Management manages the billing amount and all service details. For standard service lines, you can set up a general service for the contract or associate services to serviced assets. You can also determine whether to bill the service only during the base term of the contract or continue billing the service during the evergreen period of the contract is eligible for evergreen billing. Standard services can also be set up as passthrough, where the service is billed to the customer and part or all of the payment is paid out to a vendor. You can also specify recurring service expenses associated to a standard service line. Service expenses can be funded and paid to supplying vendors.
Linked: You link a lease or loan contract in Oracle Leasing and Finance Management to an active service contract already created in Oracle Service Contracts. Leasing and Finance Management allows you to use the full functionality of Oracle Service Contracts, and consolidates the service contract billing with lease contract billing.
To link service lines, you must first create and activate a service contract in Oracle Service Contracts.
In Oracle Leasing and Finance Management, you must have an asset line (in the current contract) that uses the same inventory item as the covered product in the service contract. When you link a lease contract service line to the service contract, Oracle Leasing and Finance Management automatically associates the asset to the covered product of the service contract.
Meet the following prerequisites for standard service lines:
Inventory items enabled as service items.
Suppliers must be set up and associated to the contract as a Lease Vendor party in the contract Parties tab.
If you are going to associate serviced assets, you must set up the asset lines on the contract in the Configuration tab.
Stream types for service payments, service expenses, evergreen service payments, service pass through and service evergreen pass through.
When you create a standard service line, you can perform the following actions:
You create the service line and enter expense and pass through details.
You can update the service line to add pass through vendors, associate serviced assets or set up service payments.
For each pass through vendor you create, you can update each vendor with the details for service pass through payouts.
Perform the following steps in the Fees and Services section of the Additional Charges subtab to create the standard service line:
Select Service in the Create field and click Go. The Create Service page appears.
In the Service field, select the Inventory service item that you are setting up.
Enter the effective date that this service starts. The contract start date defaults.
Enter the date this service ends. The contract end date for base term defaults.
Enter the cost amount of this service. This is the total fundable amount including all recurring expense payments.
In the Expenses section, enter the number of periods and amount per period and the frequency of period for the service expense. This determines the amount that is fundable and the funding dates. You can only set up expenses for standard service lines. When you set up expenses, you can fund the expenses to make payments to service providers for your service lines. You are not required to enter service expenses in order to bill a customer for services, but you must set up expenses if you want to pay service providers.
If you are creating a pass through on a service line (meaning you intend to make payouts to vendors for part or all of the payment you will bill to the customer) for the base period, then perform the following steps in the Base section:
In the Payout Basis field, select a payout basis for the passthrough from the drop-down list. The payout basis determines the date payouts are processed in Leasing and Finance Management for creating payable invoices.
Processing Date – Payouts are dated on processing date (date programs are run) after they become eligible for payout based on the Pass Through Payout Basis.
Schedule – Payouts are grouped together based on a schedule determined by the Pay Start Date, Frequency and Remittance Days after they become eligible for payout based on the Pass Through Payout Basis.
Source Date – Payouts are dated on the date they become eligible for payout based on the Pass Through Payout Basis.
In the Effective From field, select the date from which the passthrough is effective during the base period.
In the Passthrough Stream Type field, select a stream type that will be used on the invoice transactions for the payouts made to vendors from the list of values. The list of values contains only stream types with the purpose of Pass Through Service.
If you are creating a passthrough on a service line for the base period only, then click Apply to save your work and return to the Fees and Services summary table.
If you are creating a passthrough on a service line for the evergreen period, then perform the following steps in the Evergreen section:
In the Evergreen Payout Basis field, select a payout basis for the passthrough from the drop-down list.
If a formula applies to the evergreen period, select it from the list of values in the Evergreen Formula field. The formula is used to determine the total payout amount for the service payment in the evergreen period. The payout amount can be paid to one or more vendors.
In the Passthrough Stream Type field, select a passthrough stream type from the list of values. Only stream types with the purpose Pass Through Service Renewal can be selected.
Click Apply to save your work and return to the Fees and Services summary table.
After you receive confirmation of a successfully created service, you can update the service line to enter pass through vendors, associate serviced assets or enter service payments. You can also select the Remove icon to delete the service line or click on the Service Line Name hyperlink to view the service line details.
To enter pass through vendors, perform the following steps:
Click the Update icon for the service row from the Fees and Services Summary table
Click on the Create button in the Vendors section.
Select the vendor to whom you want to make pass through payments
Click Apply to save your work and return to the service details page.
Repeat steps 2-4 to add additional vendors for payout of this service line.
After adding vendors, you must set up terms you want to use to schedule or consolidate payouts. You will enter the same terms for both the base term and the evergreen term for a vendor. Perform the following steps to complete the set up of vendor terms for a pass through service line:
Select the Update for the vendor from the vendor summary table in the service update page.
Enter the fields for base term.
Click Apply to save your work and return to the vendor summary page.
Perform steps 1-2 for each vendor.
From the vendor summary page, you can expand the vendor node to view rows for the base term and the evergreen term pass through details. Click the Update icon or the Remove icon to edit or remove the details from the fee line.
Important: In addition to the terms you set up for a pass through service payments, you can also set up consolidation rules for a vendor using Vendor Disbursement Terms. This allows two methods for consolidating and scheduling pass through payouts. Insure you are aware of any Vendor Disbursement Terms that may impact the final schedule of payouts for passthrough service payments when you setup the pass through vendor terms on the service for a contract.
Passthrough payouts to vendors could exceed the fee value if you elect to payout to vendors based on cash receipts and you allow cash receipts to be over-applied to invoices. For the transaction types of Invoice-OKL, Credit Memo-OKL, or Investor-OKL, an Over-application Allowed check box appears in Receivables. This check box enables over-application of funds to invoices. Leasing and Finance Management does not support over-application of funds to invoices, and this check box should not be selected.
The following table describes the Passthrough payouts to vendors:
| Term | Description |
|---|---|
| Pay Group | (Optional) Assigns a group to vendor payouts for use in grouping payments for processing in Oracle Payables. |
| Payment Terms | Determines the date invoices become payable in Oracle Payables. |
| Payment Basis | Determines the date payouts are processed in Leasing and Finance Management for creating payable invoices. Processing Date – Payouts are dated on processing date (date programs are run) after they become eligible for payout based on the Pass Through Payout Basis. Schedule – Payouts are grouped together based on a schedule determined by the Pay Start Date, Frequency and Remittance Days after they become eligible for payout based on the Pass Through Payout Basis. Source Date – Payouts are dated on the date they become eligible for payout based on the Pass Through Payout Basis. |
| Pay Start Date | The date payouts begin for the specified vendor. |
| Payment Method | The format of payment to use when processing payments in Oracle Payables. |
| Payment Frequency | If the Payment Basis is Scheduled, determines the frequency that payouts are grouped for creating a payable invoice. |
| Remittance Days | If the Payment Basis is Scheduled, determines the actual payable invoice date for a group of payouts by adding remittance days to the date payouts are processed. |
| Disbursement Basis | Determines the basis on which a payout amount for a vendor is calculated. Fixed – the fixed amount is paid each time the payout basis occurs for the service line. Percent – the percentage of the fee payment paid each time the payout basis occurs for the service line. |
| Disbursement Fixed Amount | If Disbursement Basis is Fixed, enter the fixed amount. |
| Disbursement Percent | If Disbursement Basis is Percent, enter the percentage. |
| Processing Fee Basis | Determines the basis on which any processing fee is calculated and withheld from the payout. Fixed – the fixed amount is deduced each time the payout basis occurs for the service line. |
| Processing Fee Fixed Amount | If Processing Fee Basis is Fixed, enter the fixed amount. |
| Processing Fee Percent | If Processing Fee Basis is Percent, enter the percentage. |
After you create a standard service line, you can associate assets to the line to create serviced assets. After associated serviced assets, you can enter payments for serviced assets rather than one service payment for the service line.
To associate serviced assets, perform the following steps in the Serviced Assets section:
Click Quick Apply to automatically apply the service amount to all the assets associated with the contract. The service amount will be prorated to each asset based upon the asset cost. You can update the amounts after you quick apply if you want to adjust the automatic allocation.
Alternatively, click Add Assets to select assets. You select the specific assets you want to associate with the service and enter the amount of the service for each asset.
Note: When you link a lease contract service line to the service contract, Oracle Leasing and Finance Management automatically associates the asset to the covered product of the service contract.
After you create service lines, you can set up service payments that you bill to customers. You can associate a payment to a serviced asset.
To create service payments, click the Update icon for the row you created and enter a payment for the fee line in the fee update page. To enter the payment for a serviced asset, select the asset from the list of values. Only associated serviced assets are shown. Alternatively, you can enter a payment for any fee line from the Payments sub-tab for a contract.
Each lease contract can be associated with only one service contract and each service contract can be associated with only one lease contract. Therefore, a leased asset can be associated to only one covered product (in Service Contracts). On a lease or loan contract, however, you can have multiple assets with multiple service lines associated to multiple covered products.
When the contracts are associated (linked), Oracle Leasing and Finance Management automatically links each lease service line to the service contract line in the Oracle Service Contracts and associates each lease asset to the corresponding covered product in Oracle Service Contracts.
When you create a linked service line, you select a contract from Oracle Service Contracts. The Leasing and Finance Management service line list of values will only display active service contracts that meet the following requirements:
The contract you want to use from Oracle Service Contracts must be entered and active. The service contract must have a service line with a covered product.
Both the Oracle Leasing and Finance Management contract and the service contract must have the same operating unit, customer account, bill to address and currency.
The service contract has to be effective, fully or partially, within the effective dates of the lease or loan contract, and vice versa; that is, either all or some of the effective days of one contract must be all or some of the effective days of the other contract.
You must have created an asset in the current Oracle Leasing and Finance Management lease contract, which has the same inventory item and number of units as the covered product in the service contract in Oracle Service Contracts. Serviced asset items in both contracts must come from the same Inventory Organization.
The billing due dates (invoice due dates) must be the same.
To create a linked service line, perform the following steps in the Fees and Services section of the Additional Charges subtab:
Select Service From Service Contract in the Create field and click Go
The Link Service Contract page appears.
In the Contract Number field, select the service contract from Oracle Service Contracts.
The list of values displays service contracts in Oracle Service Contracts that meet the selection criteria for linked service contracts.
In the Supplier field, select the vendor from the list of values.
Select the payment type of the service. This is the stream type that will be used for the service-billing amount derived from your service contract and combined onto the same invoice with your lease or loan contract payments.
Click Apply to save your work and return to the Fees and Services summary.
Oracle Leasing and Finance Management automatically creates a service line, with the service name and amount derived from the service line details in Oracle Service Contracts.
To later make a change to either the Leasing and Finance Management contract or the Service contract, you must first delink the associated contracts, make the changes, and then re-associate the two types of contracts, if they should still be linked. See Associate and Delink a Service in the Oracle Service Contracts User Guide.
Note: You must ensure that the key information that links an Oracle Leasing and Finance Management contract to a service contract stays the same until booking. If, for example, you change the Bill To information in the Oracle Leasing and Finance Management contract before booking (activating), you will get an error when you attempt to validate the contract. In that case, you must change the Bill To information back to its original value, or connect the service line to a service line in Oracle Service Contracts that matches the new Bill To information.
If the contract calls for usage-based billing, you must set up usage contract lines. For example, if you supply copy machines and bill the customer based on usage (such as the number of copies made), you must set up a usage line and associate a counter to create this type of billing.
You can apply usage lines to specific assets as well as the contract. If you are applying your usage lines by asset, you must set up the asset lines in the contract.
From the Usage section of the Additional Charges tab, you can search for all the usage lines associated with the contract. Each line appears in a table containing the usage name, a description of the usage type, and the price of the usage-based charges, the minimum quantity to be billed each period, and the defaulted quantity to be billed each period.
If no usage lines are set up, none appear in the list.
When you create a usage line, a service contract in Oracle Service Contracts is automatically created. The service contract is linked to your usage line and contains the information required to calculate the periodic usage billing. The billing for usage is generated by Oracle Service Contracts and then consolidated onto a single invoice through a Leasing and Finance Management billing program.
You must set up price lists and usage items in inventory.
You must set up counters and counter groups in Oracle Install Base.
You perform the following activities to set up usage lines:
Create the usage line.
Associate usage assets to the usage line.
To create the usage line:
In the Usage section of the Additional Charges subtab click Create. The Create Usage page appears.
In the Usage Item field, select the inventory item to use for this usage billing.
In the Price List field, select the price list for determining the per unit billing rate.
In the Minimum Quantity field, enter the minimum usage volume that you want to bill per period.
In the Default Quantity field, enter the default usage volume that you want to bill per period.
Select the Average Monthly Counter Volume check box if an average is used to bill unit volume per month.
Select the Level check box if the usage volume is a level amount each period.
In the Base Reading field, enter the base reading of the usage counter.
In the Base Reading Unit of Measure field, choose the unit of measure in which the base reading is expressed from the list of values.
Select the usage type.
Enter the fixed quantity of usage that you want to bill per period.
Select the billing period.
Enter the number of periods that you want to bill.
Click Apply to save your work and return to the usage summary table.
After you create the usage line, you can associate usage assets. Perform the following steps to add usage assets to your usage line:
From the usage summary table, click the Usage Assets icon for the usage line.
Enter your asset search criteria.
Select the assets you want to associate as usage assets.
Click Apply to save your work and return to the usage summary table.
Note: To bill usage charges based on counters, you must enter or update counter readings.
After you have created all the lines on the contract, you set up payment schedules for each of the lines requiring payments if you did not enter payments when creating the contract lines. The payments you set up are used to generate invoices to customers for the contract.
When you create payments for assets, such as rents or loan payments, you can enter a payment once and then apply it to the asset lines on a contract or you can select specific lines and enter each payment separately. When you create payments for fees or services, you can enter a single payment for the fee or service line or, if the line has associated assets, you can apply the payment to the assets or enter a payment individually for each associated asset for that line.
Some types of lines require payments and some are optional. Additionally, you can select only stream types with the correct purpose for the line type of the payment. For example, you cannot create payments with a stream type purpose of Fee Payment when you select a contract line type of Asset. The stream type you can select may also be limited by the type of fee or parameters of the contract’s financial product, such as book class, revenue recognition method or interest calculation basis.
| Line Type | Qualifying Parameters | Stream Type Purposes |
|---|---|---|
| Asset | Book Class = Operating, Direct Finance, Sales Type | Rent, Estimated Property Tax, Down Payment |
| Asset | Book Class = LoanRevenue Recognition Method = StreamsInterest Calculation Method = Fixed, Reamort, Fixed/Upgrade | |
| Asset | Book Class = LoanRevenue Recognition Method = Estimated and and BilledInterest Calculation Method = Fixed, Reamort, Fixed/Upgrade | |
| Asset | Book Class = LoanRevenue Recognition Method = ActualInterest Calculation Method = Fixed | |
| Fee Line | Fee Types = Income, Miscellaneous, Pass Through, Financed, Rollover | Fee Payment |
| Fee Line | Fee Type = Security Deposit | Security Deposit |
| Service Line | Standard Service (not linked to a service contract) | Service Payment |
Some payments are automatically generated and you must set up the appropriate stream type purposes on your contract’s stream generation template. For example, if you bill an eligible contract in evergreen, the stream type with the purpose Evergreen Rent will be used for all assets billed in evergreen. For more information on setting up billing stream types on your stream generation templates, see the Leasing and Finance Management Implementation Guide.
Note: You cannot create a payment for a service line linked to a service contract. During billing, the payment information will be taken from the payment details of the linked service contract generated in Oracle Service Contracts billing processes.
You must create all contract lines on the contract.
You must set up stream types with payment type purposes on the stream generation template associated to your contract’s financial product.
Perform the following steps from the Payments tab of the contract to create payments for your contract lines:
Select the payment line type from the list in the Create section and click Go. The Create Payment page opens.
If you selected a contract line type of service or fee, then you must select a valid service or fee line to create the payment. Click the flashlight icon and choose the specific service or fee line for the payment.
If you selected asset as the contract line type, then you can select an asset to enter a payment for a specific asset or leave the asset field empty to apply the payment to all assets on the contract. You can apply the payments to the assets later or it will be done automatically for you.
If you want to select an asset, then click the flashlight icon for the Asset field and choose the specific asset for the payment.
If you selected service as the payment type or you selected fee and the fee is a rollover or financed fee, then you can also select an associated asset and enter the payment for only that associated asset.
If you want to apply the payment to all associated assets, leave the asset field blank. You can apply the payment to assets later.
Note: A brief description of the asset line appears if you selected an asset. Otherwise the name of the service or fee line appears.
In the Payments Type field, click the flashlight icon and select the payment type from the list of values of billable stream types.
In the Frequency field, select the frequency of payments in the structure.
Note: The frequency is set for the entire payment structure. You cannot mix periodic payments of different frequencies for the same line and payment type combination.
In the Structure field, select Level, 1st & Last, 1st & Last2, or 1st & Last3 from the list of values.
Select the Arrears check box if the payments in the structure are due in arrears of the rental period. Otherwise, the payments will be generated with due dates on the first day of each period.
Enter a sequenced payment structure in a multi-line table. You can enter multiple payment structure rows that can be for different amounts, including ‘0’. The total of your periods, including stub days cannot exceed the term of the contract.
Enter the number of recurring payments and the amount for periodic payments.
For stub payments, enter the number of stub days and the amount for the stub period.
Note: Leasing and Finance Management calculates the payment start and end dates for each payment structure step you enter beginning with the contract Effective From date.
Repeat steps 9 and 10 for each separate payment step you are including in this payment structure.
Click Apply to save the payment.
After you create the payment, if you want to apply the payment to the asset lines or associated assets for a fee or service line, you can Update the payment and apply it. Perform the following steps to apply a payment to assets:
From the payment summary, click the hyperlink of the payment to open the Payment summary view page.
For the payment you want to apply, click the Update icon. The Payment Update page appears. Click the Apply Assets button on the page. This apportions the payment to each asset line by the percent of the asset cost to the total cost of all assets. You can only apply payments once.
Click Apply.
Ensure that you follow these guidelines:
Enter all payments in the contract currency.
You cannot apply payments to assets for any fees other than pass through, financed and rollover fees. Other fee types either do not allow payments or cannot be associated to assets.
You may enter payments for each asset associated to a fee line. You must ensure that the amounts for each asset-level payment total the amount you entered for the fee and the payments for each associated asset must be for the same frequency and number of payments.
You do not enter payments for usage and insurance lines. They are billed based on the parameters you set up for the line and the associated insurance policy and/or service contract and price list.
In Leasing and Finance Management, a stub period defines the amount to be billed for the number of stub days entered. Only one payment will be generated for each stub period. Stub periods are non-recurring. A stub period differs from "interim" and "per diem," which define an amount per day to be calculated and billed.
If you choose a structure other than Level, advance payments will automatically be created when you generate streams. The amount of the advance payment will be determined by how many last payments are in the structure you selected (1, 2 or 3 times the first rental or loan type payment). The advance payment stream will create one upfront payment stream element for the amount due on the first billing date and an off-setting amount (negative) in the final periods. When combined and billed together with your regular rent or loan payment, the net effect will be a large payment at the first due date that includes the advance rent and payments of “0” in the final periods.
If you want to remove a sequenced step from the payment structure, select the Remove check box to the left of the sequence line you want to remove. A stub period is one period of several days in Oracle Leasing and Finance Management. You cannot have stub periods next to each other; they must be separated by at least one payment structure step.
Each day of the rental period must be accounted for in your payment structure. For example, if you add a stub period and also enter the same number of recurring payments as the contract term, the total payment periods will exceed your contract term. In this example, you would enter one less period payment than your term and an offsetting number of stub days as your last payment step to have a starting and ending step that total the full period to make up your entire rental period. The billing periods start and end on the same day of the month as the contract start date (Effective From). If you want to define a due date that differs, use the Stub Days and Stub Amount fields. In the Stub Days field, enter the number of stub days. If you enter stub days in a payment row, you cannot also enter a recurring periodic payment. The stub days is not recurring and the amount you enter covers the entire period of the stub.
The values for the display-only Start Date and End Date for each detail level line are determined by the following calculation formulas:
Start Date = For the first payment line, the start date equals the contract start date, or the asset line start date. For all other lines, the start date equals the previous line End Date + 1 day
For validated stub lines (stub days and stub amount, only): End Date = Start Date + Stub Days – 1 day.
For validated non-stub lines (period and amount, only): End Date = Start Date + [number of months] – 1 day.
If your contract includes fixed or variable interest rates, you must enter the interest rate details. For example, you must specify whether the interest rate is fixed or variable, what the conversion rates are, and define calculation methods. If the interest rate is variable, you must enter the variable rate details that match your contract and interest scenario.
For more information on variable rate contracts, see Variable Rate Contracts.
To create interest rate details, perform the following tasks in the Variable Rate summary section in the Payments subtab of the Contracts details page:
Select the applicable variable rate in the Add Rates list. Click Go. The Add Rate parameters page opens.
Enter the variable rate details and click Apply.
The following table describes interest rate fields:
| Field | Description |
|---|---|
| Index Name | Select from interest index setup |
| Base Rate | Enter manually |
| Adder Rate | Enter manually |
| Minimum Rate | Enter manually |
| Maximum Rate | Enter manually |
| Principal Basis | Select Actual or Scheduled |
| Interest Basis | Select Simple or Compound |
| Interest Start Date | Defaults from the contract start date |
| Days in a Month | Either 30 or the actual number of days |
| Days in a Year | Select 360, 365, or the actual number |
The following table describes additional interest rate fields:
| Field | Description |
|---|---|
| Delay Basis | |
| Rate Delay | In days or months |
| Rate Delay Frequency | Enter manually as number of days or months |
| Compounding Basis | |
| Compounding Frequency | Select either Daily, Monthly, Quarterly, or Annual |
| Formula Name | Select from formulas setup |
| Catchup Basis | |
| Catchup Start Date | Defaults from the contract start date |
| Catchup Frequency | Select either Monthly, Quarterly, Semi-Annual, or Annual |
| Catchup Settlement | Select Credit, Adjust, or Do Not Adjust |
| Catchup Basis | Must be Actual |
| Change Basis | |
| Rate Change Frequency | Select from Daily, Monthly, Quarterly, Annual, Anniversary Date, Billing Date, Date of Calendar Month, Date of Calendar Month and Calendar Year |
| Rate Change Start Date | Defaults from the contract start date |
| Rate Change Value | Enter manually |
The following table describes conversion basis fields:
| Field | Description |
|---|---|
| Conversion Option Code | Select applicable |
| Next Conversion Date | Enter manually |
| Conversion Type | Select applicable |
If you require your customers to insure the assets on the contract, then you have two methods for insurance:
enter information about an insurance policy the customer holds with a third party, or
sell an insurance policy to the customer using the Leasing and Finance Management insurance feature.
Third Party Insurance Overview
You can set up a third party insurance policy to indicate that the customer has provided proof of their own insurance for covering losses to assets. Third party policies are not tracked for other optional types of insurance, such as business risks or life insurance. You can enter a policy for each contract or enter a policy on a master lease that covers all contracts that reference the master lease (master leases are referenced in the contract header details page).
If the customers provided their own insurance, you can track whether or not you receive proof of that policy and place your own insurance if that proof is not provided. For more information on how to manage third party policies and the placement of your own insurance using the Leasing and Finance Management insurance feature, see the Leasing and Finance Management Insurance Overview section.
The third party policies you enter for a contract are assumed to cover all assets and you can only enter one policy for lease insurance for the contract. The policy appears as a policy in the summary table along with other insurance policies you create for optional insurance. Third party insurance policies do not require insurance quotes and do not generate any billings, disbursements or accounting records. You enter third party insurance policies using the General tab on the Contract details page.
Leasing and Finance Management Insurance Overview
The Leasing and Finance Management insurance feature allows you to set up insurance products, quote, and create policies for two types of insurance:
lease insurance that covers losses to the assets on your contracts
optional insurance that covers other types of losses such as business interruption or life insurance.
You set up insurance products and providers, then use those products to quote insurance coverage or automatically place lease insurance when you require it but no third party policy has been provided by your customer. You can only place policies automatically for lease insurance and not optional type insurance. The placement program can also be configured to create and assign follow up tasks if there are contracts for which an automatic policy cannot be created because you do not have insurance products available to cover a contract. For more information on setting up insurance tasks, see Define Insurance Tasks, Oracle Lease Management Implementation Guide
An insurance policy can be made active by activating it in the Lease Center (the Oracle Leasing and Finance Management customer service module) or by billing a policy and receiving payment (applying a cash receipt). Once the payment is received, the policy is automatically activated. You can set a parameter that will also activate the policy upon partial payment.
You can record claims against policies in the Leasing and Finance Management customer service module, Lease Center. Although you cannot use the module to manage claims, you can log the claim for tracking purposes and put a billing hold on related asset payments. You can also accept insurance quotes and activate, delete or cancel policies in the Lease Center.
Set Up Insurance
You can perform the following insurance tasks for a contract during contract authoring:
Search and view insurance quotes and policies
Create and accept a lease insurance quote
Create and accept an optional insurance quote
To view insurance quotes, enter the status of the quote you want to view or leave the status list empty to view all quotes. Click Go. The list of quotes appears and displays key information about the quote, such as the provider, premium amount and effective dates. Once a quote is accepted, an insurance policy is created automatically. You can view the insurance policy created for a quote by clicking on the policy number hyperlink. To view the quote, click the quote number to go to the quote view page. You can accept an active quote from the quote summary table by clicking the Accept icon for the quote row.
Set up lease insurance and optional insurance products and rates in Oracle Leasing and Finance Management.
Perform the following steps in the Insurance section of the Additional Charges subtab of the Contract details page:
Select Lease Insurance Quote in the Create field and click Go.
The Create Lease Insurance Quote page appears. At the bottom of this page, all asset lines associated with this contract appear. The table includes asset description, quantity, original equipment cost, asset category, insurance class, and location. The total amount of the original equipment cost of all the asset lines is the amount being insured with this quote.
In the Provider field, select the provider for the lease insurance. Only providers with valid insurance products are displayed.
Select the location of the equipment to be covered by the insurance policy.
Select the payment frequency.
Note: The premiums are calculated on a monthly basis. A half-yearly payment includes six premiums.
If the lessor is insured by the policy, then select the Lessor Insured check box.
If the lessor is the payee on the policy, then select the Lessor Payee check box.
Enter the start date of the policy in the Insurance Effective From field.
Enter the length of the insurance policy (in months) in the Term field.
Enter the Quote Effective From and To dates.
These dates specify the time during which the quote is valid for acceptance.
Click Continue to automatically select an insurance product, determine a valid premium rate, and calculate the premium.
If you want to adjust the quote amount, enter the adjustment amount in the Adjustment field.
This amount is subtracted from the premium total. The adjustment calculates an Adjusted Premium number and records who made the adjustment.
Complete the quote. You can complete the quote by taking one of the following actions:
Accept Quote: Click this button to accept the quote, create a quote number and a policy number. You cannot modify a quote once it is accepted.
Save Quote: Click this button to save the quote and create a Quote Number. You can later search for the quote, using the Active filter, to accept or modify the quote.
Modify: Click this button to enable you to make modifications to the lease insurance quote and then to recalculate the premium.
You can manually activate an insurance policy in the Lease Center. SeeAbout the Insurance Tab.
The application automatically activates the policies if the invoice for the premium is paid. Policies are billed once the quote is accepted.
To calculate the premium, a valid insurance product is identified automatically based on the location, the provider selected, the equipment cost to be covered by the policy and the effective dates. Your insurance products must be set up correctly for the providers, locations, equipment cost ranges and dates to deliver only one valid policy per contract. You may have multiple providers, but only one valid product per provider for a contract can exist. For more information on setting up insurance products, see Define Insurance Products, Oracle Lease Management Implementation Guide.
You can only have one active lease insurance policy for the same date range during the contract term.
Perform the following steps in the Insurance section of the Additional Charges subtab of the Contract details page:
Select Optional Insurance Quote from the list of values in the Create section and click Go. The Create Optional Insurance Quote page appears.
In the Insurance Product field, click the flashlight icon and choose the optional insurance product you want to quote for the customer.
The provider and insurance factors for the optional insurance product appear in read-only fields.
Enter the Factor value.
The insurance product you set up determines the factor.
Enter the Name of Insured party.
Select the location of insurance from the list of values in the Country field.
Enter the amount of coverage provided in the policy in the Covered Amount field.
The premium rate (as determined by the factor value and corresponding rates for the product selected) is multiplied by this coverage amount to determine the monthly total premium.
Select the payment frequency for the policy.
Note: The premiums are calculated on a monthly basis. A half-yearly payment includes six premiums.
If the lessor is the insured party, rather than the customer, then select the Lessor Insured check box.
If the lessor is the payee of the policy, then select the Lessor Payee check box.
Enter the date the insurance policy become effective in the Insurance Effective From field.
Enter the length of the policy in the Terms field.
Enter the Quote Effective From and To dates.
These dates specify the time during which the quote is valid for acceptance.
Add additional details to the quote.
Click Continue to calculate the premium.
If you want to adjust the quote, then enter the adjustment amount in the Adjustment field.
This amount is subtracted from the premium total. The adjustment calculates an Adjusted Premium number and records who made the adjustment.
Complete the quote. You can complete the quote by taking one of the following actions:
Accept Quote: Click this button to accept the quote, create a quote number and a policy number. You cannot modify an accepted quote.
Save Quote: Click this button to save the quote and create a Quote Number. You can later search for the quote, using the Active filter, to accept the quote.
Modify: Click this button to enable you to make modifications to the optional insurance quote and then to recalculate the premium.
You must activate an optional insurance policy in the Lease Center. See About the Insurance Tab.
You can have multiple optional insurance policies, but not for the same insurance product for the same contract and date range. The possible ranges of factor values are assigned to premium rates that are used to calculate the premium amount. This information is used to determine the premium rate for the product. For example, if the insurance factor was set up as age for age ranges 1-50 and 50 - 999, you could set different premium rates for those two ranges. Once you enter the age factor value, say 45 for the covered person, the correct rate is derived and multiplied times the coverage amount to determine the monthly premium rate for the policy quote.
Oracle Leasing and Finance Management uses Oracle descriptive flexfields to enable you to capture additional contract data for common contract business objects such as the contract header, contract lines, and contract parties. Descriptive flexfields allow you to set up additional fields on a contract. You can enter additional flexfield information during the contract authoring process and when importing data with imported contracts. Flexfield data can be updated during contract revision, rebooking, and can be enabled for viewing and update from the Lease Center. You can also enable descriptive flexfields so customers can view them and vendors can view flexfield data in the Customer Self Service and Vendor Self Service portals.
Before using additional flexfields in Leasing and Finance Management, you must set up users, responsibility, and site level profile options to determine who can view and update additional contract fields in the Lease Center. Profile option setups also determine whether descriptive flexfields are displayed in Customer Self Service and Vendor Self Service.
To view and update descriptive flexfields on a contract in the Lease Center, set the OKL: Update Descriptive Flexfields to Yes. This profile option allows users to view and update additional flexfield data on a contract. If the OKL: Update Descriptive Flexfields profile option is set to No, then the Lease Center Descriptive flexfields will be read only.
To enable descriptive flexfields on a contract in Customer Self Service, set the OKL: View Contract Additional Information in Customer Self Service profile option to Yes. Flexfields cannot be updated from Customer Self Service.
To enable descriptive flexfields on a contract in Vendor Self Service, set the OKL: View Contract Additional Information in Vendor Self Service profile option to Yes. Flexfields cannot be updated from Vendor Self Service.
For more information on setting up profile options, see Appendix A - Profile Options in the Oracle Leasing and Finance Management Implementation Guide
Leasing and Finance Management enables you to add flexfield structures to contract headers, contract parties, and contract lines for assets, fees, and services. You can setup more than one structure for any part of the contract that has been enabled for descriptive flexfields, but you can only use one structure for part of a single contract. When you see the Additional Information section on a contract, if there is more than one flexfield structure set up for that part of the contract, you select one of the structures to use for that section. Then you complete the fields that comprise the selected flexfield structure.
Once you determine what additional contract information you want to add to a contract, see theOracle Applications Flexfield Guide for information on using Oracle descriptive flexfields. When you set up a flexfield structure, you must associate it to a part of the contract where you want to use it. Set up and enable the following flexfields to use in Leasing and Finance Management:
For Contract Headers: OKL_K_HEADERS_DF
For Contract Lines: OKL_K_LINES_DF
For Party Roles: OKL_K_PARTY_ROLES_DF
The following table indicates the location where you can enter additional information for parts of a contract if you enabled the associated flexfields and assigned structures to them:
| Contract Section | Location |
|---|---|
| Header | General tab for a contract. |
| Parties | Party Details page from the Parties tab for a contract. |
| Assets | General tab for an asset from the Configuration tab for a contract. |
| Fees | Fee Details page from the Additional Charges or Configuration tabs for a contract (fee types are found in both tabs). |
| Services | Service Details page from the Additional Charges tab for a contract. |
Once you activate a contract, it can be billed, accounted for, and processed for changes. The process of making a contract active is Booking. Booking includes the following steps:
Validate the Contract
Calculate Upfront Tax (if taxes are enabled for your operating unit)
Price and Submit Contract
After each step, the contract changes statuses. You can tell what activation processes have been performed by the contract status. Contracts that have not yet begun the booking process are in New or Incomplete status. If you update a contract after completing any of the booking steps, the contract returns to Incomplete status and you must complete the booking steps again before a contract is activated.
You start the booking process by clicking on the Activate Contract button and using the guided train steps. The booking checklist keeps track of which steps you have completed. However, you cannot move to the next step of the train if the current step cannot be completed. You must correct any errors and restart the train. You can exit the train at any point and restart from where you left off based on the contract status.
You use the checklist to access results of the booking process steps even after you have completed booking. From the checklist you can view the validation results, streams and other important details of the booking and pricing process.
You can also view the yields calculated for the contract after you have completed the pricing step. The following table lists the contract summary displayed on the Booking Summary Overview page:
| Field | Description |
|---|---|
| Book Classification | The book classification derived from the contract’s financial product. |
| Effective From | The start date of the contract you entered on the contract header details page. |
| Total Financed Amount | The total capitalized cost of the equipment and fees financed on the contract. |
| Total Funded | The total amount of all approved funding requests of type Asset or Expense. |
| End of Term Option | The end of term purchase option you entered in the Purchase Options terms in the Terms and Conditions tab for a contract. |
| Total Upfront Sales Tax Amount | The total amount of any upfront taxes calculated for the equipment on the contract. |
| True Tax | Yes if the tax owner is Lessor, otherwise No. |
| Effective To | The end date of the original contract term. |
| Total Residual Amount | The total amount of residual for all asset lines on the contract. |
| Total Subsidies | The total amount of all subsidy adjustments for all assets on the contract. |
| End of Term Amount | The purchase amount of the end of term option you set up I the Purchase Options terms in the Terms and Conditions tab for a contract. |
| Residual Value Insurance Premium | If you enabled RVI, set a premium rate and you are using external stream generation, the amount of the fee line automatically created for the insurance premium. |
The following table lists the yield summary displayed on the Booking Summary Overview page:
| Yield | Description |
|---|---|
| Pre-Tax Internal Rate of Return | The yield includes cash inflows from payments related to fees and assets, but not services, usage or insurance. Cash inflows also include payments for down payments and interim interest but not subsidies. Cash outflows include equipment costs and expenses for fees, but not services, usage or insurance. |
| Booking Yield | Includes the same cash flows as the IRR, but cash flows are discounted on an accounting period basis not periodically. |
| After-Tax Internal Rate of Return | The yield includes cash outflows associated with income tax payments. This yield is only calculated if you are using external stream generation. |
| Implicit Interest Rate | The rate includes only cash flows associated with financing activities. Cash flows for periodic income and expense fees are not included. |
| Subisdized Pre-Tax internal Rate of Return | The same rate as the unsubsidized Pre-Tax IRR, but the cash inflows include payments for subsidies. |
| Subsidized Booking Yield | The same rate as the unsubsidized Booking Yield, but the cash inflows include payments for subsidies. |
| Subsidized After Tax Internal Rate of Return | The same rate as the unsubsidized After-Tax IRR, but the cash inflows include payments for subsidies. |
| Subsidized Implicit Interest Rate | The same rate as the unsubsidized Implicit Rate, but the cash inflows include payments for subsidies. |
You can view the status of checklist items required to complete booking if you set up booking items on checklists and used a lease application with an associated checklist as the source of your contract or associated a credit line with checklist to your contract (on the General tab for the contract).
From the checklist summary, you can view the results of checklist items that are executed automatically or update the items you can simply check off on the list. If an item is not completed or did not pass, the status of the item indicates whether you need to correct it. The status of all checklist items is passed in the seeded approval workflow notification during the approval step of the booking process. If your user profile has been enabled for it, you can add items to the checklist or update items other than the simple check off box. Otherwise, to update a check box, click the Update button and select the check box for the completed items.
Contract validation is the first step in the activation process. Leasing and Finance Management uses a feature called QA Checker to check the contract for data inaccuracies or inadequacies prior to starting the tax or pricing calculations. All validations must be passed or at a validation level of Warning before you can proceed to the tax calculation or pricing steps.
The QA Checker can be modified or extended to meet your needs for contract validation. A set of minimum validations are seeded on the list for the QA Checker associated to the Lease or Loan contract validation. Most of the seeded items are set at a validation level of Warning. Only items critical to the proper functioning of the contract are set to validation level of Error. You cannot remove any seeded validation, but you can change the validation level from Warning to Error. You cannot lower a validation item from Error to Warning.
You can add items to the seeded QA Checker. The items you add can be very flexible and include actual code extensions that perform activities in the application or actively look up data real time during the validation step. For more information on modifying the QA Checker, see the Oracle Core Contracts User Guide.
If the contract successfully passes validation, the contract status changes to Passed. Click Continue to go to the next activation step, or click Save for Later to maintain the Passed status and come back to the activation process later.
To view the validation list at any point after it has been completed, you can click on the Details icon in the Activation Checklist to view the validation results.
If you have enabled the Upfront Tax check box during Oracle Leasing and Finance Management set up, then the booking process calculates and displays the tax lines and the total amount of upfront sales tax. Tax lines are stored by the Tax Engine and viewed on the tax summary details page for a contract from the activation checklist.
If you have enabled upfront tax and set it up to be financed, a financed fee line will be created automatically. You must return to the Configuration tab or the Payments tab and set up a payment for the financed tax fee line before you can continue booking.
Click Continue to go to the next activation step, or click Save for Later to maintain the Passed status and come back to the activation process later.
To view the tax summary list at any point after it has been completed, you can click on the Details icon in the Activation Checklist to view the tax information.
If your contract passed validation and the taxes are properly calculated, the next step is pricing and submission. Pricing includes the generation of streams for a contract and calculation of contract yields. If you are satisfied with the pricing results, you submit the contract for approval to book and activate it.
Generate Streams
This process generates the streams and yields for the contract. The yields appear on the Booking Summary page after the system has generated streams.
To start the stream generation pricing process, click the Price button on the Price and Submit step of the train.
If the value of the Stream Generation Method field on the stream generation template for your contract’s financial product is set to Internal, the streams will be generated automatically using the internal stream generation pricing engine and the contract status changes to Complete. If there is any error in pricing using the internal stream generation engine, you will see the error immediately on the page.
If the value of the Stream Generation Method field on the stream generation template for your contract’s financial product is set to External, you submit a pricing request to the external stream generation pricing engine. After submitting your request, you will see the request number and a Refresh button. You can click the Refresh button to check if the request has been completed. Once your request has been sent to the pricing engine, received back and processed for results without any errors, you receive a message and the contract status is updated to Complete. If the process completes, but there were errors in processing the results or the pricing engine found errors while performing calculations, the process will show Complete with Errors. You can view the stream results to determine if the errors need to be corrected. If the errors result in an incomplete contract or the process cannot be completed, you will receive an error warning and the contract status remains Passed.
After the streams have been generated, the yields appear on the Booking Summary page.
If you want to review the stream results before you submit the contract for booking approval, you can click Save for Later and return to the Activation Checklist. Click the Details icon in the Price Contract row and search for streams to view. Otherwise, you can submit your contract for booking approval to complete the booking process.
The actual streams that are generated depend on how you configured the stream generation template associated to your contract’s financial product. You can also set up a financial product for reporting purposes by associating a reporting product to your contract’s financial product. The stream generation template associated to the reporting product is also used to generate stream with the stream purpose of Reporting for use with Leasing and Finance Management’s Multi-GAAP feature.
Streams are used for a variety of purposes including billing, accounting and reporting.
See: Streams and Pricing, Oracle Lease Management Implementation Guide
Viewing Streams
To review the stream results, click Save for Later and return to the Activation Checklist. Click the Details icon in the Price Contract row. In the streams search page, you can select the type of contract line you for which you want to view streams or leave it blank to view streams for the contract. To view contract line streams, select either Asset, Fee, or Service line and click Go. The results show you the streams generated for that line. To view the details of a stream such as the stream elements, select the stream name.
Submit
If you are satisfied that all checklist items are completed, that the pricing is correct and the status of the contract is Complete, you submit the contract for booking approval. By submitting the contract for approval, a workflow is initiated using Oracle Workflow and routed based on your workflow configuration. You can configure the workflow to perform functions, check on items and make decisions based on conditional values. You can also configure thw workflow to use Oracle Approvals Manager. The Approvals Manager works in conjunction with your HR Organizations to determine the right user to whom approvals should be routed. The seeded approval workflow automatically approves all contracts. The workflow transaction type for the booking approval required to set up Oracle Approvals Manager is: OKL LA Conract Booking Approval. For more information on setting up Oracle Workflow and Approvals Manager, see Oracle Approvals Management Implementation Guide.
When a contract is approved, Leasing and Finance Management performs a number of activities to complete the contract booking and activation. Leasing and Finance Management performs the following tasks for activating a contract:
A record for each asset is created in Oracle Install Base. The Install Base record stores the asset location and serial number information. You can use the Install Base record to store other information about asset equipment. See Create Install Base Records.
Depending upon the book class and tax owner of your contract’s financial product, a fixed asset record is created in Oracle Assets. The following table describes the asset type entries made depending upon the book class and tax owner combinations.
| Book Class | Tax Owner | Asset Entries in Oracle Assets |
|---|---|---|
| Operating | Lessor | Asset created in Corporate book for fully capitalized asset cost. Asset created in selected Tax books for fully capitalized asset cost. Asset created in Tax book for fully capitalized asset cost if the book class of the reporting product associated to the contract’s financial product is Operating. The Tax book is determined from the book set up as reporting book in Setup tab. |
| Operating | Lessee | Not allowed on contract. |
| Direct Finance | Lessor | Asset created in Corporate book for –0- cost. Asset created in selected Tax books for fully capitalized asset cost. |
| Direct Finance | Lessee | Asset created in Corporate book for –0- cost. Asset created in selected Tax books for –0-. |
| Conditional Sale | Lessor | Not allowed on contract. |
| Conditional Sale | Lessee | Asset created in Corporate book for –0- cost. Asset created in selected Tax books for –0-. |
| Loan | Lessor or Lessee | No asset created. |
A call is made to the Leasing and Finance Management Accounting Engine. The transaction type is Booking. All accounting set up to generate journal entries for the Booking transaction type will be generated. For more information on booking accounting, see appropriate sections of the Leasing and Finance Management Implementation Guide and the Leasing and Finance Management User Guide.
The contract status is updated to Booked and all streams and asset lines on the contract are updated to Active status.
Invoices are created for any subsidies set up to be billed.
Invoices are created for any upfront taxes set up to be billed.
Interim interest for any pre-fundings is calculated. If you have set up the amount to be capitalized, then the amount is included in the fully capitalized asset cost. If you have set up the amount to be billed, then any catch up billing is invoiced.
If there are any advance receipts for the contract that match streams generated, then the invoices for the receipts are created and the receipts are automatically applied.
Linked records are created for service lines with linked Oracle Service Contracts.
An Oracle Service Contract is created for any usage lines.
When a Contract Administrator creates a contract with serialized assets, new Oracle Install Base (IB) records must be created, if they do not already exist, so that duplication is avoided. If the IB record already exists in Install Base, you must link the serialized asset to the IB record.
The following scenarios clarify what action you must take:
If the serial number you entered for an asset exists in Oracle Install Base, and the serial number was created by an external application, the asset will be associated to the IB record
If the serial number you entered for an asset does not exist in Install Base, a new IB record will automatically be created.
When you create a non-serialized asset, you must create a new IB record.
If the serial number you enter for an asset already exists in Install Base, and the asset was created in Leasing and Finance Management, you will receive a Uniqueness Violation error message
Caution: These scenarios do not apply to Usage Based Billing contracts.
The following procedures address these scenarios:
Link Serialized Asset to Install Base
Create Install Base Record for Serialized Asset
Create Install Base Recored for Non-Serialized Asset
Navigate to Customers > Contracts and select or create a contract.
Click Save and Add Details.
Navigate to the Configuration Tab to create a serialized asset and click Apply.
From the Update dropdown list associated to the serialized asset, select Serial Number and click Go.
Enter the serial number for each unit of the serialized asset and click Apply.
Navigate to the Summary tab and click Activate Contract.
If the serial number you entered exists in the Install Base, the IB record is linked to the serialized assets.
Navigate to Customers > Contracts and select or create a contract.
Click Save and Add Details.
Navigate to the Configuration Tab to create a serialized asset and click Apply.
From the Update dropdown list associated to the serialized asset, select Serial Number and click Go.
Enter the serial number for each unit of the serialized asset and click Apply.
Navigate to the Summary tab and click Activate Contract.
If the serial number you entered does not exist in the Install Base, a new IB record will be created for the serialized assets.
Navigate to Customers > Contracts and select or create a contract.
Click Save and Add Details.
Navigate to the Configuration Tab to create a serialized asset and click Apply.
Navigate to the Summary tab and click Activate Contract.
A new IB record will be created for the non-serialized assets.
All currency information in Oracle Assets is recorded in the functional currency of the set of books, with all the conversions performed automatically if the functional currency is different from the contract currency.
After a contract is activated, you cannot perform the following activities:
Modify a contract without performing a contract revision, mass rebook or a contract re-lease. Non-financial updates can still be made through the Lease Center.
Creating pre-funding requests.
Price or validate a contract.
Record advance receipts for a contract.
Calculate upfront taxes.
After a contract is activated, you can still perform the following activities:
Create funding requests that are not pre-funding types.
De-link a service contract.
View streams, pricing and validation results.
View contracts in Customer and Vendor Self-Service modules.
You can attach documents in multiple formats associated with a contract, sales quote, or lease application. You can also add, delete, query, or update any files that you attach. Attachments types include files, URLs, or text. Authorized users will have easy access to any attached files.
When adding an attachment, you must select the attachment Category, which determines the level of access to the documents in the application and in the Lease Center. You can select from the following two options:
Miscellaneous – has the least restrictions in access with the attachments being shared in both the application and the Lease Center.
Lease – more confidential, allowing access in the application, but not in the Lease Center
At the end of the process, the Publish to Catalogue icon enables you to configure the attachments to be shared with other people.
To attach a document to a contract, sales quote, or lease application, perform the following steps:
Search for the contract.
Open the contract.
Click Attachments.
Click Add Attachments.
Enter Title and Description.
Select the Category
Choose the attachment file.
Click Apply.