Lease Management Application Implementation Tasks

This chapter covers the following topics:

Define Streams and Pricing

This section contains the following topics:

Define Stream Types

This section includes the following topics:

Overview

Lease Management allows you to set up and create stream types to meet your unique business accounting requirements. When creating a new stream type, you must provide a stream type name and a stream type purpose. Appropriate values for the stream type attributes can then be selected. User-defined streams allow you to perform the following functions:

For more information on streams, see Streams, Oracle Lease Management User's Guide.

Stream Purposes

During stream type setup, you must select a purpose for each new stream type. Lease Management processes streams based on their purpose.

For more information on Lease Management stream purposes, see Stream Purposes.

Set Up Stream Types

This section includes the following topics:

Create or Update Stream Types

Use the Stream Types page to create or update stream types. You can create as many stream types as you need. Lease Management also provides seeded stream types organized by Purpose Name. For information on seeded stream types, see Stream Purposes.

To create stream types, perform the following tasks:

Some attributes are validated based on Purpose. The following table describes field references used when creating or updating stream types.

Field References: Creating or Updating Stream Types
Field Description
Billable Specifies whether a stream type is billable or not. Only billable stream types can be used to create payments for a contract.
Taxable Specifies whether a stream type is taxable. Taxes are calculated at the time of billing.
Capitalized Capitalizing a stream adds the fee amount into the financed cost of the asset. For example, you can add a stream type representing sales tax, which at the time of booking is added to the asset cost.
Effective Dates Stream Types cannot be used after the Effective To date. If an Effective To date is not entered, the stream type will not expire. Stream types can be deactivated by entering an Effective To date at a later time.
Description Optionally, enter a description.
Revenue Recognition Basis Determines whether Accrual Rules can be ignored.
Note: Updatable. See Update Accrual Streams.
Contingency Rules The list of values contains the revenue contingency seeded in Receivables for recognition of revenue on receipt of cash for certain Lease Management invoices. Select Contingency only if the Revenue Recognition basis is Cash Receipt for the stream type.

Search for Stream Types

Use the Stream Types page to search for a stream type. You can search using the parameters of Name, Purpose, Effective Dates and the attributes of Billable, Taxable, and Capitalize.

Define Stream Generation Template

Before Lease Management can generate streams, you must define a stream generation template. You must complete the following tasks before using the stream generation template:

Create Stream Generation Template

The stream generation template contains all possible streams to be used for contracts with the financial product associated to the template. Each stream generation template must include at least one of each type of the mandatory seeded stream purposes. To determine which seeded stream types are mandatory, see Stream Purposes.

The following table describes template attributes from the Create Stream Generation Template page.

Field Description
Operating Unit The operating unit assigned to the record.

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.
Effective Dates Only contracts with start dates falling between Effective Dates of the stream generation template will be able to use financial products associated with the template.
Product Type Indicates if the stream generation template is for use in an Investor Product or a Financial Product.
Book Classification Indicates the book classification of any financial product that the template may be associated to by the accounting template set.
Booking Pricing Engine Indicates whether the stream generation template will use the internal or external pricing engines to calculate yields and generate streams. All contracts using a financial product associated to a stream generation template will use the pricing engine defined here.

Note: The pricing engine does not apply to templates used with Investor Products.
Tax Owner Defines the tax owner: lessee or lessor. The tax owner affects the composition of the template by requiring certain mandatory purposes.
Interest Calculation Basis Determines what interest calculation basis will be used to calculate interest. This field is not applicable to investor agreements.
Revenue Recognition Method Determines what revenue recognition method will be used. This field is not applicable to investor agreements.
Days in a Year Select 360, 365, or Actual.
Days in a Month Select 30 or Actual.
Internal Arrears Payments Select either Last Day of Period or First Day of Next Period to set the date of payments in arrears generated by the internal stream engine.

Note: You can update the stream generation template until you activate it. Once the stream generation template is Active, you cannot make updates to the fields. If you later change the template status, then you cannot update the template details. Only the Effective To date can be updated in that situation.

Select Primary Stream Types and Purposes

After entering stream generation templates, select the primary stream types and purposes in the Primary Stream region of the Create Stream Generation Template page. Some stream purposes may only be defined once, and others may be defined multiple times. Purposes that are defined only once are usually values looked up by an internal program. Purposes that can be defined multiple times on the same template are usually purposes for stream types that you select for the contract or process.

Primary stream purposes are selected when executing actual transactions in the in the life cycle of a contract. Dependent stream purposes are created to support accounting processes around the primary purposes. Dependent streams exist only as an extension of primary streams.

Note: In Stream Generation Templates with a Loan Book Classification and an External Booking Pricing Engine, the following Dependent Streams of the Primary Stream Purpose Rent require that a valid Pricing Name be associated to each of them:

Not associating a valid Pricing Name may lead to pricing errors or the failure of the pricing program.

Enter Dependent Stream Types and Purposes

For a given stream purpose, certain dependent stream types are mandatory. You may set up additional streams to be generated whenever the primary stream is used. To determine which dependent streams are mandatory for a primary purpose, see Stream Purposes.

Select the stream type name for each dependent stream that will be generated whenever the primary stream is used.

Enter Pricing Names

Pricing names are used in external stream generation only and are codes from external pricing engines that you must associate to the stream type in order to retrieve streams from the external pricing engine.

Enter Pricing Parameter Details

Entering pricing parameter details is an option when using an external pricing engine. Pricing parameters are defined for each financial product and must be associated to a pricing engine name. Lease Management generates streams based on the pricing engine name. Pricing parameters send additional data to the pricing engine during steam generation.

In the Pricing Parameters region of the Create Stream Generation Template page, you can add the pricing parameters for the template, including the Pricing Engine Identifier and Default Value. The Pricing Engine Identifier determines how your parameters are recognized by the external pricing engine. Default pricing parameters can be used during stream generation and modified later.

The Display and Update check boxes provide the ability to view and update pricing parameters during contract booking.

The following table shows pricing engine names for the SuperTRUMP pricing engine for stream purposes based on the primary and dependent stream purposes you select for your template. Pricing names are not required if you are creating a template for use with the internal pricing engine. For additional pricing names, contact your external pricing engine provider.

Pricing Engine Names
Purpose Pricing Name
Accrued Fee Expense Single Periodic Expense Accrual
Accrued Fee Income Single Periodic Income Accrual
Amortized Fee Expense Single Fee Accrual
Amortized Fee Income Single Fee Accrual
Book Depreciation Book Depreciation
Capital Reduction Capital Reduction
Down Payment Down Payments, Rent
Down Payment Down Payments, Loans
Federal Depreciation Federal Depreciation
Fee Payment (Normal) Periodic Income
Fee Payment (Single payment income fees that require amortization streams) Fee
Interest Income Single Lending Loan Accrual
Interest Payment Lending Loans Interest
Lease Income Single Asset Income Accrual
Loan Payment Lending Loans Debt Service
Principal Balance Lending Loans Balance
Principal Payment Lending Loans Principal
Rent Rent
Rent Rent without Down Payments
Rent Accrual Single Rent Accrual
Security Deposit Security Deposits
State Depreciation State Depreciation
Stip Loss Value Stip Loss Value
Subsidy Income Single Subsidy Accrual
Termination Value Termination Value
Unscheduled Principal Payment Principal Paydowns
Estimated Property Tax Periodic Income

Associate Stream Generation Template to an Accounting Template Set and Financial Product

Once a stream generation template set has been completed, it must be associated to an accounting template set and financial product. An accounting template set can have only one stream generation template.

When the accounting template set is associated to a financial or investor product, the stream generation template becomes associated to the product. This association allows Lease Management to find the correct stream template to use for a contract based on the effective date.

To associate a stream generation template to an accounting template set, see Associate Financial Products to Lease Price Modeling Software Templates.

Stream Generation

The streams generated for a contract depend on the stream generation method and the contract's financial product. For more information on stream generation, see Stream Generation and Management, Oracle Lease Management User's Guide.

Associate Financial Products to Lease Price Modeling Software Templates

During contract authoring, you have to determine accounting rules and other terms and conditions that drive the financial aspects of your contract. Once you've defined these, you can generate streams. Generating streams produces schedules of dates and amounts used for billing and accounting and produces yields for the contract. In complex pricing scenarios, you can use lease price modeling software to generate streams, which evaluate thousands of pricing parameters. In these cases, the pricing structure might involve a myriad of possibilities, including uneven rents, skipped payments, and multiple interest rates for periods within the term of the contract.

In Oracle Lease Management, the accounting of a particular contract is defined by a financial product. You can associate financial products in Oracle Lease Management with template files in your lease price modeling software. This lets you set default values in a template within your software and relate them to certain products in Oracle Lease Management.

Note: To proceed with this step, your lease price modeling software must support templates.

For example, in a leasing enterprise, your lease price modeling software differentiates leases and loans, since these two deal types use different pricing. You can set up templates that default certain values for these two types of contracts.

In Oracle Lease Management, you can configure financial products that account for leases and loans differently. While loans concern only interest and principal, a lease can impact many other factors, such as equity and depreciation. You can map these products to pricing templates in your pricing software, similarly configured to account for these two separate deal types.

Prerequisites

Setup Oracle Lease Management financial products. See Define Financial Products.

Configure pricing templates in your lease price modeling software and insure they are physically stored on the correct server path.

Steps

Perform the following steps:

  1. Click Create in the Product Pricing Templates page.

  2. In the Name field, type the exact name (case sensitive) of the template to associate with the financial product.

    Oracle Lease Management uses Oracle XML Gateway technology to transfer information into and out of the lease price modeling software. Youmust type the name of the template exactlyas it appears in the lease price modeling software, including the file extension, such as .tem.

  3. In the Product field, enter a partial search string or click Go and select the name of the financial product to associate with a pricing template.

  4. In the Template Path, enter the exact path to where the template file is located on the server for your lease price modeling software.

    You must include the forward slash at the end of the path.

    Note: The template files must exist on the server, or the application will generate an error.

  5. Select an Effective From date and, optionally, select an Effective To date.

    You cannot use a template after the Effective To date. If you leave this field blank, the template is available indefinitely. Later, you can specify an Effective To date to stop using it.

  6. Enter a Description for the pricing template.

  7. Click Apply.

Set Up Parameter Conversions For Third-Party Lease Price Modeling Software

To properly model depreciation during stream generation and pricing, you should map the depreciation methods and pro rate conventions you set up in Oracle Assets to those in your lease price modeling software.

This mapping is case sensitive and the values must be entered exactly as they exist in the third-party software.

Prerequisites

The third-party lease pricing modeling software you are using must be defined in your lookups. See Define Lookups.

Set up depreciation methods and pro rate conventions in Oracle Assets.

Steps

Perform the following steps:

  1. Click Create in the Conversions page. The Create Conversions page opens.

  2. Select the parameter for which to map values.

  3. In the Oracle Value field, click the Flashlight icon and choose the depreciation method value from Oracle Assets to map.

  4. In the Pricing Engine Value, enter the value of the parameter that you are mapping the Oracle Value to.

    The pricing engine value is case sensitive and MUST be entered exactly as it appears in the third-party lease price modeling software.

  5. Repeat steps 3 and 4 for all the values to map for the selected parameter.

  6. Click Apply.

  7. After saving your mapping, you can go back and choose a new parameter (for example, pro rate convention) and repeat the process.

Guidelines

You can remove any value mapping by selecting the check box for the applicable Parameter Name and clicking the Remove button.

It is extremely important that you map all values that you intend to use during your lease pricing exercises. If you do not map all the values, errors will occur.

Set Up Book Type Mapping For Third-Party Lease Price Modeling Software

Optional

If the third-party lease price modeling software that you use for pricing differentiates between federal and state tax depreciation, you must set up those tax books in Oracle Assets. Because you can set up different depreciation settings for the same asset category in Oracle Assets by book, you must indicate which tax books to use for state taxes and which books to use for federal tax purposes to get the correct depreciation streams from the lease price modeling software you are using.

You must map the appropriate Oracle Assets tax book to the appropriate taxing body--such as federal or state--for all tax books your business uses. See Define Books and Asset Categories.

If your business uses multiple corporate books, which have multiple tax books associated with them, you must set up this mapping for all books that you intend to use during your business operation.

Prerequisites

You must set up corporate and tax books in Oracle Assets. For more information, see the Oracle Assets User Guide.

You also must define the name of your third-party lease price modeling software in lookups during general implementation. See Define Lookups.

Steps

Perform the following steps:

  1. On the Book Type Mappings page, if you have mapped any tax books, those mappings appear in the table at the bottom of the page.

  2. Click Create in the Book Type Mappings page. The Create Book Type Mappings page opens.

  3. In the Tax Book field, click the Flashlight icon and choose the tax book from Oracle Assets to map from the list of values.

  4. In the Depreciation field, choose whether the tax book should be referenced for Federal or State calculations.

  5. Repeat steps 3 and 4 for all tax books you are using in your business.

  6. Click Apply.

Guidelines

If you are using the same tax book for both federal and state calculations, you still must map that tax book to both values.

You can remove any tax book mapping by selecting the applicable tax book and clicking the Remove button.

Define Setups for Pricing Tools

Create Item Residuals

You can create item residuals as specific number or as a percentage of the asset cost. The values are entered for an item, item category, or a residual category set. The residual category set is a group of items or item categories that you create for the purpose of setting common residual values. The values you set up can be used to determine end of term values for the items you select on sales quotes in the quoting process. To create item residuals, enter item residual details in the Create Item Residual page. Click Apply.

For more information on item residuals, see Pricing Overview, Oracle Lease Management User's Guide.

The following table describes item residual details.

Create Item Residual Fields
Field Description
Operating Unit Operating unit assigned to the record.

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.
Source Type From the inventory setup: Item, Item Category, Residual Category Set.
Item Select the inventory item or item category for which an item residual value is to be assigned.
Residual Type Indicates whether an item residual is an Amount or a Percentage.
Currency Determines the currency used.
Status Indicates whether an item residual is New, Active, or Inactive.
Term Term of the residual value.
Residual Value Enter the value, as an Amount or Percentage, for the item or item category selected.

Create Residual Category Sets

Residual Category Sets allow you to group together inventory items with similar residual values. You create residual category sets, and assign inventory categories to the sets.

For more information on residual category sets, see Pricing Overview, Oracle Lease Management User's Guide.

To create a residual category set, enter residual category set details in the Create Residual Category Set page. Click Apply when done. The following table describes residual category set fields.

Field Description
Name Name of the residual category set
Description Optional description of the residual category set
Source Type From the inventory setup: Item, Item Category, Residual Category Set
Status Items or item categories can be removed from a residual category set if the status is Inactive
Item Item to be associated to the residual category set

Create Criteria Categories

Eligibility criteria can be assigned to financial products, lease rate sets, standard rate templates, and program agreements business objects. You can enter criteria values when you create new versions of each object that will control how the version can be used on a sales quote or lease application. To add criteria values to these business objects, you must first create criteria categories and associate the category to the business object class, also known as the source type. Categories are also created for use in defining adjustment types for adjustment matrices.

For more information on eligibility criteria and criteria categories, see Pricing Overview, Oracle Lease Management User's Guide.

To create criteria categories, enter criteria category details in the Create Criteria Category page. To create a new eligibility criteria, select Eligibility Criteria Category from the menu and click Go. Click Apply when done. The following table describes eligibility criteria category fields.

Eligibility Criteria Category Fields
Field Description
Name Name of the eligibility criteria category
Description Optional description
Value Type Multiple, Range, or Single
Data Type Number, Date, or Varchar2
Sourced Yes or No
Enabled Yes or No
Evaluation Function Provides evaluation of the eligibility criteria category in the context of an object.

To create an adjustment category, select Create Adjustment Category in the Criteria Categories page and click Go. Enter adjustment category details and click Apply. The following table describes Create Adjustment Category page fields.

Create Adjustment Category Fields
Field Description
Name Name of the adjustment category
Description Optional description of the adjustment category
Value Type Range, Single, or Multiple
Data Type Number, Date, or Varchar2
Sourced Yes or No
Enabled Yes or No
Evaluation Function Provides evaluation of the criteria category in the context of an object.

Set Up For Revenue Recognition on Receipt of Cash

To create a Stream Type for cash basis receipts:

In the Create Stream Type page, name a stream type and select the seeded purpose, for example, Fee Payment.

In Revenue Recognition Basis (formerly Accrual Rules) the values include:

Accrual – With Rule: Income is accrued after evaluating the accrual rules.

Accrual – Without Rule: Income is accrued without evaluating the accrual rules. Cash Receipt: Income is not accrued.

Select Cash Receipt.

In the Contingency field, select the default: Collectible. Lease Management uses the collectibility contingency functionality in Oracle Receivables to defer revenue.

Select appropriate values for other stream type attributes.

Create the stream generation template and accounting template using the cash basis stream type. Associate the accounting template set to a product, create a contract, and run billing transactions using standard procedures.

These setups will generate cash basis accounting in Oracle Receivables processing. When you run the concurrent programs to calculate the general loss provision, the program will exclude open invoices generated from stream types with Cash Receipts revenue recognition basis.

Define Formulas

These implementation tasks affect the setup of Oracle Lease Management formulas:

The Formula Engine is a tool that lets you define custom formulas and process them.

Oracle Lease Management processes formulas in many different areas. Formulas are always relevant to either a particular contract or an individual line on a contract. Examples of formulas that Oracle Lease Management uses include asset residual, contract original equipment cost, and contract capitalized fees.

The components of a formula are operands, functions, and function parameters. Formulas execute within contexts. For more information on these terms and the concepts underlying formulas, see Formula Engine.

You can create or modify formulas and some of their components.

Note: To perform any task relating to formulas, it is essential that you understand how the Formula Engine works. See Formula Engine.

Define Formula Functions

The basis of all formulas is data that exists in one or more database tables. You extract the data and make it available to formulas via functions.

A function is a unit of code, written in PL/SQL, which when executed returns a single value. Formulas effectively combine the results of one or more functions to produce an overall value.

To include a new function, either as part of the process of creating a new formula or to add the function to an existing formula, create the source PL/SQL function and store it in the database. For more information, see Formula Engine.

After you have created the source PL/SQL function, you define the formula function in Oracle Lease Management; this step registers the function in Oracle Lease Management so that it can be used in formulas.

Prerequisites

Create the source PL/SQL function in the database package OKL_SEEDED_FUNCTIONS_PVT.

Steps

Perform the following steps:

  1. Click Create on the Functions page. The Create Function page opens.

  2. Enter the function name, and optionally, the description.

  3. Enter the Effective From Date, and optionally, the Effective To date.

    The optional Effective To date determines when to stop using the function. If you do not specify an Effective To, the function is available for use indefinitely.

  4. Enter the source function that you are registering.

    Note: The name of the source function must include the package name, that is OKL_SEEDED_FUNCTIONS_PVT.<Function Name>.

  5. Click Apply.

See Also

Formula Engine

Define Non-Standard Function Parameters

If a function requires parameters other than the standard contract and line id parameters, then define the non-standard function parameters.

To define the non-standard function parameters, search for the function, select the function, and choose to create or edit function parameters.

Prerequisites

Create the source PL/SQL function in the database package OKL_SEEDED_FUNCTIONS_PVT.

Define Formula Functions.

Steps

Perform the following steps:

  1. Use the Functions page to search for the function.

  2. In the Results panel, click the function name hypertext link.

  3. Click Update in the Function details page. The Update Function page for the applicable function opens.

  4. In the Function Parameters area, click Add Another Row to add the function parameters.

  5. Enter the Sequence of the function parameter.

  6. Select the Parameter.

  7. If the function parameter has a static value in the source function, enter this value in the Static Value field.

  8. Optionally, enter instructions.

  9. Click Apply.

See Also

Formula Engine.

Define Contexts

Each formula executes within a context. A context is basically a container for formulas that enables the efficient passing of parameter values to the functions of a formula.

You must associate each formula that you create with a context. If you do not have a context that you can associate with your formula, then you must create the context. You can associate a formula with only one context, but you can associate many formulas to the same context.

For more information, see Formula Engine.

Steps

Perform the following steps:

  1. Click Create in the Contexts page. The Create Context page opens.

  2. Enter the context Name, and optionally the Description.

  3. Click Apply.

    Note: If you have to create context parameters, see Create the Context Parameters and Formula Engine, and perform the procedures in both sections.

Define Formula Operands

A formula is an arithmetic expression consisting of operands and arithmetic symbols.

For example, the formula:

Commission := Delta Amount * 0.05 + Group Bonus

consists of three formula operands:

An operand has one of three types:

Before you create or alter a formula, you must define the operands that appear in the formula. For more information, see Formula Engine.

Prerequisites

Create the source PL/SQL function in the database.

If you are creating an operand of the type formula, you must have defined the formula in Oracle Lease Management.

If you are creating an operand of the type function, you must have defined the formula function in Oracle Lease Management. For more information, see Define Formula Functions.

Steps

Perform the following steps:

  1. Click Create in the Operands page. The Create Operand page opens.

  2. Enter the Name for the operand, and optionally, the Description.

  3. Enter the Effective From date, and optionally, the Effective To date.

    The optional Effective To date determines when to stop using the operand. If you do not specify an Effective To, the operand is available for use indefinitely.

  4. In the Operand Type field, select the type of operand: Function, Constant, or Formula.

  5. If, for your Operand Type, you chose

    • Function: Select the Function Name.

    • Formula: Select the Formula Name.

    • Constant: Enter the constant or expression in the Constant Value field.

  6. Click Apply.

Define Formula

Each formula must be created within a context. As you create the formula, you must specify the context name for the formula.

You must enter the formula string, which is an arithmetic expression consisting of labels of operands and the symbols +  -  *  /  (  ).

Once you have created an operand it is available for use in a formula string. However you do not enter the operand name itself into the formula string; instead, you must create a label for the operand, and use the label in the formula string. An operand label is a shortcut or alias for an operand.

The procedure for creating the formula is a two-stage process:

For more information, see Formula Engine.

Define Formula and Formula String

Prerequisites

Create the source PL/SQL function in the database.

If you are creating a formula type operand of the type formula, you must have defined the formula in Oracle Lease Management. For more information, see Define Formula.

If you are creating a function type operand, you must have defined the formula function in Oracle Lease Management. For more information, see Define Formula Functions and Define Formula Operands.

Steps

Perform the following steps:

  1. Click Create on the Formula page. The Create Formula page opens.

  2. Enter the formula Name, and optionally, the Description.

  3. Enter the Effective To date, and optionally, the Effective From date.

    The optional Effective To date determines when to stop using the formula. If you do not specify an Effective To, the formula is available for use indefinitely.

  4. Choose the Context for this formula.

  5. In the formula String field, enter your formula.

    The string must consist of formula operand labels that you define in Define Formula Operand Label and one or more of the symbols: +  -   *   /   (   ).

  6. Click Apply.

Define Formula Operand Label

Once you have created the formula and formula string, you must create the operand labels. To create operand labels, you must:

  1. Search for the formula.

  2. Select the formula.

  3. Choose to create or edit formula operands. This final step is where you actually create or edit the operand labels that the formula string uses.

Prerequisites

Define Formula and Formula String

Steps

Perform the following steps:

  1. Search for the formula in the Formulas page.

  2. In the Results area, click the formula name's hypertext link. The Formula details page opens.

  3. Click Update. The Update Formula page for the applicable formula opens.

  4. Click Add Another Row in the Formula Operands area.

  5. Enter the Label for the operand name.

  6. Select the operand to associate with the label into the Name field.

  7. Click Apply.

    Note: To define each formula operand label, you must repeat steps 1 though 7 as described previously in this section.

Accounting Options

Define Accounting Options

Lease Management accounting options consist of the following setup tasks:

To define your Accounting Options, navigate to Setup > System Options > Accounting Options and select the Operating Unit and Ledger from the list of values. The list of values shows which ledger is associated with an operating unit in the Accounting Setup Manager in General Ledger.

In the initial setup, the Operating Unit must be associated with the Set of Books once and cannot be changed later. In following setups, you select the Operating Unit, but not the Set of Books.

Account Derivation Options

Set Up for Account Codes Derivation

Lease Management provides two methods to derive an account code for transactions in Lease Management. The method to derive the account code is determined by selecting the Account Derivation accounting system option. You can select one of the following values as the account derivation option for your accounting scenario.

You can change the system option value once from Accounting Template Set to Accounting Methods Builder to stop using Lease Management to generate default accounts and instead switch over to Subledger Accounting. However, once the system option value is set to Accounting Methods Builder, it cannot be changed back to Accounting Template Sets.

Account Derivation Option is ATS

If the Account Derivation Option is ATS, you must define the following:

Lease Management uses the above setups to derive the default account codes for Lease Management, Oracle Receivables, and Oracle Payables accounting transactions, but not for transactions accounted in Oracle Assets. The account codes for Lease Management transactions accounted in Oracle Assets are derived based the on the setup data in Oracle Assets.

Lease Management has predefined setups in Oracle Subledger Accounting in the form of the seeded Lease Default application accounting definition for transactions accounted in Lease Management. The Lease Default application accounting definition is designed to accept the default accounts without change for transactions accounted in Lease Management.

Optionally, you can define your own accounting rules in Subledger Accounting to create accounting that meets your business requirements. In Subledger Accounting, you use the Accounting Methods Builder (AMB) to define the way subledger transactions are accounted. To do this, you create and modify subledger journal line setups and application accounting definitions. These definitions define the journal entries that enable an organization to meet specific fiscal, regulatory, and analytical requirements. These definitions are then grouped into subledger accounting methods and assigned collectively to a ledger. For more information, see Accounting Methods Builder (AMB) Overview, Oracle Subledger Accounting Implementation Guide.

Note: If you create user-defined application accounting definitions in place of the seeded application accounting definitions in any of the applications, such as Lease Management, Receivables, Payables, or Assets, to use as your accounting, then Subledger Accounting overwrites the default accounts generated for the transactions in those applications.

For transactions like receivables invoices, credit memos, and invoice adjustments generated in Lease Management and accounted in Receivables, or for payable invoices and debit memos generated in Lease Management and accounted in Payables, the default account generated by the setups in Lease Management are sent to the respective applications when the those transactions are interfaced to those applications.

Accounting Template Set

Accounting Template Set Overview

Accounting transactions, such as booking a contract, billing, and funding will generate one or more accounting entries. The main components controlling which accounting entries are generated are the following:

Each Lease Management product is always associated with one, and only one, accounting template set. You can associate the same accounting template set to multiple products.

An accounting template set is a group of accounting templates. Each accounting template and its associated template lines specify the accounts. A stream generation template must be added to each accounting template set.

Create Accounting Template Set

To create and accounting template set, navigate to Accounting Template Set. From the Accounting Template Set page, click Create.

Enter the accounting template set details and associate a stream generation template with it. One stream generation can be selected for each accounting template set.

Accounting Templates

Accounting Templates Overview

Each accounting template defines the accounts and accounting entries that are generated for an accounting transaction. Before creating an accounting template, you must have created an accounting template set.

Create Accounting Template

To create an accounting template, perform the following steps.

  1. Navigate to Setup > Accounting > Accounting Template Set.

  2. In the Accounting Template Set details page, click Accounting Templates.

  3. Enter the Accounting Template details. Refer to the parameter table below.

  4. Click Apply.

Accounting Template Parameters
Parameter Description
Name The Name of the accounting template is a mandatory field.
Effective From The start date of the accounting template cannot be used for a transaction with a transaction date before the start date.
Effective To The end date of the accounting template.
Stream Type Stream Type of the transaction, such as rent, security deposit, or interest income.
Transaction Type Defines an accounting event, such as funding, booking, billing, or disbursement. The list of values shows only those transaction types that are enabled for accounting.
Formula If the amount to be accounted is to be evaluated rather than provided by the transaction. A formula is required if the transaction type is one of the following: Asset Disposition, certain Accrual transactions, Booking, Evergreen, Rebook, Release, Split Asset, Investor, Termination, or Principal Adjustment.
Factor or Investor Select Investor if the accounting template is used for a contract that is associated with an Investor Agreement with an Investor code. The default value is Null.
Investor Code Select an Investor Code defined on the Investor Agreement to which the contract is associated.
Memo Indicates if there is alternative accounting for the same transaction. For example, in the case of accrual of income for delinquent accounts, you can transfer the income to alternate accounts.
To account for accruals, you must create two accounting templates, each with the transaction type Accruals, within the same accounting template set. One of the accounting templates must have the Memo field set to No, for an income account, and the other must be set to Yes, for a non-income account.

Accounting Template Default Rules

The accounting engine uses defaulting rules to identify the accounting template. The defaulting rules apply to Memo, Investor Flag, and Investor Code parameters.

The hierarchy of the combination of parameter values which determine the accounting template is given below. For example, an accounting transaction makes an accounting call specifying Memo = Yes, for a contract that is associated with an active investor agreement and the investor special accounting code.

  1. The accounting engine tries to match all three parameters, as described in combination 1 below.

  2. If no template is available, the match is attempted excluding Investor code, as described in combination 2 below.

  3. If no template is available, the match is attempted excluding the investor flag and code, as described in combination 3 below.

  4. If no template is available, combinations 4 to 6 are attempted in sequence.

  5. If all combinations 1 to 6 fail, the accounting engine returns Error.

Hierarchy Memo Investor Flag Investor Code

  1. Yes Yes Yes

  2. Yes Yes Null

  3. Yes Null Null

  4. No/Null Yes Yes

  5. No/Null Yes Null

  6. No/Null Null Null

Accounting Template Lines

Accounting Template Lines Overview

For each accounting template, you must define only two accounting template lines, one for debit account and one for credit account. For each accounting template line, you must define either an account code or an account generator rule to build an account code using the data available from the transaction and account generator setup, or both.

Define Accounting Template Lines

To define an accounting template line, navigate to the accounting template and enter all values for the accounting template, then enter all values for the accounting template line. Enter credits and debits on the appropriate lines.

You must specify one of the following methods:

Account Derivation Option is AMB

If the Account Derivation Option is AMB, then perform the following setups:

  1. Accounting Template Set – as described in the previous section

  2. Accounting Template – only for the transactions for which amounts are derived by formula on the accounting templates. See the previous section.

  3. 3. All components of AMB

You cannot define accounting template lines and the account generator.

The following table describes setup tasks in Subledger Accounting.

Setup Task Description
Define Custom Sources Sources are pieces of information that Subledger Accounting uses to determine how to create accounting for an accounting event. You use sources to provide transaction information to Subledger Accounting. Lease Management predefines a comprehensive set of sources, but you can optionally define custom sources to extend the list of sources available to application accounting definitions.
See: Custom Sources, Oracle Subledger Accounting Implementation Guide.
Define Journal Line Types Journal line types determine the characteristics of subledger journal entry lines. These characteristics include whether the line is used to create actual, budget, or encumbrance entries, whether the line is a debit or a credit, whether matching lines are merged, and whether data is transferred to the general ledger in summary or detail form.
See: Journal Line Types, Oracle Subledger Accounting Implementation Guide.
Define Journal Entry Descriptions Journal entry descriptions determine both the content and sequence in which the elements of a description appear on a subledger journal header and line. Lease Management has seeded default journal entry descriptions. You can optionally define your own journal entry descriptions. You can build descriptions using any of the sources for Lease Management.
Assign journal entry descriptions headers and lines in the Applications Accounting Definition window. See: Defining Journal Entry Descriptions, Oracle Subledger Accounting Implementation Guide.
Define Mapping Sets Mapping sets associate a specific output value for an account or account segment. Based on the input value, a specific value can be assigned to a single segment or to the entire account. You use mapping sets when you set up account derivation rules.
See: Mapping Sets, Oracle Subledger Accounting Implementation Guide.
Define Account Derivation Rules Account derivation rules determine the accounting for subledger journal entries.
See: Account Derivation Rules, Oracle Subledger Accounting Implementation Guide.
Define Journal Lines Definitions Journal lines definitions let you create sets of line assignments (journal line types, journal entry descriptions, and account derivation rules) for an event class or event type. These sets can be shared across application accounting definitions. You can assign multiple journal lines definitions to an event class or event type.
See: Journal Lines Definitions, Oracle Subledger Accounting Implementation Guide.
Define Application Accounting Definitions An application accounting definition is a collection of components or rules that determine how Subledger Accounting processes accounting events to create subledger and general ledger journal entries. You can also indicate whether to create accounting for a particular event class or event type.
Each event class and event type assignment consists of a header assignment and one or more journal lines definition assignments. A header assignment includes a journal entry description and journal lines definition.
See: Application Accounting Definitions, Oracle Subledger Accounting Implementation Guide.
Define Subledger Accounting Methods A subledger accounting method is a grouping of application accounting definitions that comply with a common set of accounting requirements. Assign newly defined application accounting definitions to a subledger accounting method in the Subledger Accounting Methods window.
See: Subledger Accounting Methods, Oracle Subledger Accounting Implementation Guide.
Assign Subledger Accounting Methods Assign each subledger accounting method to a ledger using the Accounting Setup Manager.
See: Using Accounting Setup Manager in the Oracle Financials Implementation Guide.

Representation Options

Representation Options setup determines how and where the transactions originating in Lease and Finance Management will be accounted. It also determines if and how the secondary representation of a transaction shall be generated. Before setting up the representation options, you must complete ledger setups in Oracle General Ledger and asset book setups in Oracle Assets.

To set up Representation Options, you must complete the following steps.

Rounding Options

Rounding options address those situations where general accounting practices or currency conversion leads to split, or non-whole number, monetary amounts. Typically, the situation occurs in leasing whenever a percentage is figured into the calculation, such as a calculating interest. Another scenario occurs when a leasing transaction is made in a currency other than your functional currency and a conversion must be made. Rounding options can be set to specify how an amount should be rounded.

Accounting Line Rounding Options

Accounting Line Rounding Options are called Transaction Rounding Options if the Account Derivation Option is set to AMB. In this case, the option does not apply to the accounting template line amounts.

When setting the rounding rule, you can choose one of the following:

Cross Currency and Stream Rounding Options

This rule is applied to any difference arising on account of currency conversion between the contract currency and functional currency, or between the functional currency and the contract currency. Typically, the rounded difference is added to the highest amount line. For Apply Rounding Difference, you can select:

Financial Options

Financial options for an operating unit are described in the following table.

Financial Options for Operating Units
Field Description
Accrual Reversal Days Determines how many days of prior income should be reversed in the event that a contract fails accrual rules. For example, by entering 90 you would be reversing accrual transactions dated in the past 90 days before the accrual processing date.
Like Kind Match Limit Days Determines how many days a terminated asset is available for matching with a like kind asset.
Generate Accrual Master Program Select Validate Contract Start Date or Do Not Validate Contract Start Date.
Validate Contract Start Date - Generate Accrual Concurrent Program processes accrual stream elements with dates on or after the contract start date.
Do Not Validate Contract Start Date - Generate Accrual Master Program processes accrual stream elements with any dates.

Define Operational Options

Required

You must set up the applicable operational options for authoring, terminations, remarketing, and billing at the operating unit level.

Steps

In the Operational Options page, search the operating unit for which you want to set the options and click Update.

Specify the following authoring options:

Select the applicable termination options. To start income accruals from the previous month of the termination date when computing future income, select Check Accruals Till Previous Month option.

Select the applicable remarketing options.

Confirm if you want to use the lease inventory organization for billing.

Define Lease Quoting Options

Required

Set up the lease quote options to specify the category set for the contract item categories.

Click Update in the Lease Quoting Options page. The Update Lease Quoting Options page opens. Enter the applicable details and click Apply.

Associate XML Layout Templates to Lease Management Report Templates

Required

After you create or modify and register the layout template and data templates in XML Publisher, you must associate the template to a Lease Management report templates. The association enables Oracle Lease Management to use the applicable template while generating the document or report. Additionally, you must specify the type of recipient of the documents and reports.

Steps

Perform the following:

  1. Click Create in the Report Templates page. The Create Report Templates page opens.

  2. Enter applicable details and click Apply.

Define Account Generator

Optional

In Oracle Lease Management, you can employ the Account Generator to dynamically create accounting code combinations for transactions at run-time. Accounting code combinations are your debit and credit accounts that are part of each accounting transaction.

In an accounting template, you can use exact account codes or you can choose to build the account codes dynamically for each line. The Account Generator builds the account codes dynamically based on parameters provided by the transaction.

If you choose to build an account code dynamically for an accounting template line, you must specify an account generator rule for the accounting template line. Each account generator rule is one of the seeded Oracle Lease Management accounting line types; examples are accrual clearing, advanced rent, lease rent, pre funding, revenue clearing.

The object of the Account Generator is, for each account generator rule, to set each segment of the account code to either a constant value or the value from the flexfield column in a source table.

The setup sequence for the account generator sources and rules is as follows:

Once you have set up the account generator sources and rules, you use them when you create an accounting template line; all you have to do is to select the account generator rule that you want for the accounting template line. For more information, see Define Accounting Template Lines.

To enable the Account Generator, you must:

Account generator functionality is not available if the Account Derivation Option is set to Accounting Method Builder (AMB).

Define Account Generator Rules

Optional

After you define account generator sources, you can set Account Generator Rules, whereby you designate which segments in a flexfield contain a constant value and which derive their value from a flexfield in a source table.

Navigation

Setup > Accounting > Account Generator Rules

Steps

Perform the following steps:

  1. Select the Account Generator Rule.

    In the Results area, all the defined segments appear.

  2. For each segment, choose a source or a constant.

    If you choose a constant, that value you input never changes for this account type. Choosing a source enables the Account Generator to dynamically update the value from the column specified when you defined the account generator source. For more information, see Define Account Generator Sources.

  3. Click Apply.

Define Account Generator Sources

Optional

If you plan to have accounting templates that incorporate dynamic generation of all or some account code flexfield values, you must define your account generator sources, by mapping each account generator rule with a source.

An account generator rule is a seeded list which is user extensible. Some examples are accrual clearing, advanced rent, lease rent, pre funding, and revenue clearing.

Sources are seeded table and column names defined in various Oracle applications, such as Oracle Receivables or Oracle Assets. An example of a source is the column Asset Clearing in the Asset Categories table in Oracle Assets.

When defining the Account Generator Sources, you associate each account generator rule with a source.

Navigation

Setup > Accounting > Account Generator Sources

Steps

Perform the following steps:

  1. On the Account Generator Sources page, click the Create Account Generator Source button.

    The Create Account Generator Source page appears.

  2. Select the 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.

  3. From the list of values, choose the Account Generator Rule.

  4. From the list of values, choose the Source Table value.

    This is the table containing the source flexfield that you are mapping to the account type corresponding to the account generator rule.

    Depending on which source table you choose, the possible values in the Select Column list of values change accordingly.

  5. Choose the flexfield column you want from the Select Column list of values.

    This is a defined instance of the source flexfield.

    A source table can have multiple columns. For example, the source table Asset Categories has the flexfield columns Accumulated Depreciation, Asset Clearing, Asset Cost, and Bonus Reserve.

  6. Click Apply.

See Also

Account Codes Derivation

Oracle Applications Flexfields Guide

Account Generator Sources

The following table lists Account Generator Sources.

Account Generator Sources 
Application Name Page Name Input Parameter Labels
Oracle Assets Asset Categories Asset Category + Asset Book Asset Cost
      Asset Clearing
      Accumulated Depreciation
      Accumulated Depreciation
      Bonus Reserve
Oracle Payables Financial Options -- Accounting Operating Unit Liability
      Prepayment
      Discount Taken
      PO Rate Variance Gain
      PO Rate Variance Loss
Oracle Payables Supplier Site -- Accounting Supplier Site Liability
      Prepayment
      Future Dated Payment
Oracle Receivables Customer Site - Accounts Customer Bill To Site Receivable
      Revenue
      Tax
      Freight
      Clearing
      Unbilled Receivable
      Unearned Revenue
Oracle Receivables Transaction Types Transaction Type Receivable
      Revenue
      Tax
      Freight
      Clearing
      Unbilled Receivable
      Unearned Revenue
Oracle Foundation Resource Employee Freight
      Revenue
      Receivable
Oracle Inventory Master Item - Purchasing Item Expense Account

Account Generator Transaction Types

The following table lists Account Generator Transaction Types.

Account Generator Transaction Types 
Transaction Type Application Name Page Name Field Input Parameter from Transaction Contract Asset level Parameter
Funding Receivables Customer Site- Accounts Receivable Customer Bill-to-site Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Funding Payables Financial Option- Accounting Liability Operating Unit Contract
      Prepayment    
      Discount Taken    
      PO Rate Variance Gain    
      PO Rate Variance Loss    
Funding Foundation Sales Representative Freight Sales Person Contract
      Revenue    
      Receivable    
Funding Receivables Transaction Type Receivable Transaction Type Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
Booking Receivables Customer Site - Accounts Receivable Customer Bill-to-site Contract
    Revenue      
    Tax      
    Freight      
    Clearing      
    Unbilled Receivable      
    Unearned Revenue      
Booking Payables Financial Option- Accounting Liability Operating Unit Contract
      Prepayment    
      Discount Taken    
      PO Rate Variance Gain    
      PO Rate Variance Loss    
Booking Foundation Sales Representative Freight Sales Person Contract
      Revenue    
      Receivable    
Booking Receivables Transaction Type Receivable Transaction Type Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
Rebook Receivables Customer Site - Accounts Receivable Customer Bill-to-site Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Rebook Payables Financial Option- Accounting Liability Operating Unit Contract
      Prepayment    
      Discount Taken    
      PO Rate Variance Gain    
Rebook Foundation Sales Representative Freight Sales Person Contract
      Revenue    
      Receivable    
Rebook Receivables Transaction Type Receivable Transaction Type Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Miscellaneous Receivables Customer Site - Accounts Receivable Customer Bill-to Site Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Miscellaneous Payables Financial Option- Accounting Liability Operating Unit Contract
      Prepayment    
      Discount Taken    
      PO Rate Variance Gain    
      PO Rate Variance Loss    
Miscellaneous Foundation Sales Representative Freight Sales Person Contract
      Revenue    
      Receivable    
Miscellaneous Receivables Transaction Type Receivable Transaction Type Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Billing/ Credit Memo/ Debit Memo/ Disbursement Receivables Customer Site - Accounts Receivable Customer Bill-to-site Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
Billing/ Credit Memo/ Debit Memo/ Disbursement Payables Financial Option- Accounting Liability Operating Unit Contract
      Prepayment    
      Discount Taken    
      PO Rate Variance Gain    
      PO Rate Variance Loss    
Billing/ Credit Memo/ Debit Memo/ Disbursement Foundation Sales Representative Freight Sales Person Contract
      Revenue    
      Receivable    
Billing/ Credit Memo/ Debit Memo/ Disbursement Receivables Transaction Type Receivable Transaction Type Contract
      Revenue    
      Tax    
      Freight    
      Clearing    
      Unbilled Receivable    
      Unearned Revenue    
Billing/ Credit Memo/ Debit Memo/ Disbursement Inventory Master Item Expense Account Item Asset
Billing/ Credit Memo/ Debit Memo/ Disbursement Assets Asset category Asset Cost Asset Category + Asset Book Asset
      Asset Clearing    
      Accumulated Depreciation    
      Bonus Reserve    

Define Financial Products

These implementation tasks affect the setup of Oracle Lease Management financial products:

A product in Oracle Lease Management groups together a set of attributes and rules upon which contracts are created. It is mandatory for every contract to be associated with a single product.

The attributes are called qualities and are used for grouping and identifying the product. There are several pre-seeded qualities, and together with their pre-seeded quality values, these are used to classify contracts (see Seeded Contract Classification Parameters). You can also create your own qualities and quality values. There is no processing functionality behind the user-defined qualities and quality values.

Business rules are grouped under options. The values set for each of the business rules are used by the processes during the life-cycle of the contract.

The rules and structuring of the contract determine its classification. The accounting norms define accounting for each classification. The accounting is defined under an accounting template set, which is associated with the product at the time you are setting up your products.

For example, operating leases are accounted for differently than direct finance leases. Therefore, it is highly likely that the deal type would be pre-set as an option for a product.

Note: To facilitate workflow and logical product creation, you should map and define the various attributes, as well as the business rules to apply to each of the products you are creating. Decisions such as which attributes to define on the template level, which to define on the product level, and which options to make editable at the contract level should be made prior to implementation.

It is possible for you to override some of the option values, which default from the product while authoring the contract.

You can also associate stream types to a financial product, which you can also set to accrue (Accrual Rules). For more information on stream types, see Define Streams and Pricing.

There is no limit to the amount of financial products that you can configure for your enterprise. For more information on lease authoring, see the Oracle Lease Management User Guide.

Definitions

Quality: Qualities defined on a product cannot be modified on the contract. These are used for grouping and identification and, except for the pre-seeded qualities and quality values, have no processing functionality associated with them. You can define as many qualities as you need for your enterprise. You can separately define qualities for templates and products.

Value:The result set that you can use for a quality.

Procedural Steps for Defining a Product

The following points detail the general steps required to define a financial product that Oracle Lease Management uses during contract authoring.

Lessors who write large deals can require that the product be defined with few business rules as these can differ substantially between contracts. The accounting template set containing the accounting pairs for the entire life cycle of the lease are also associated to the product.

The following table provides the eight steps and the order in which you define a product:

Steps for Setting up Financial Products
Task Required
Define Template Quality Names Optional
Define Template Quality Values Optional
Define Product Qualities Optional
Define Product Quality Values Optional
Set up Product Templates Yes
Set up Product Yes

Seeded Qualities and Quality Values

Each Oracle Lease Management contract must have a product, and each product must have a product template.

In order to classify contracts, first you must add one or more of the seeded qualities to a product template (see Seeded Contract Classification Parameters).

Within a single product template, you can have the quality Investor, or the four qualities: Lease, Taxowner. Interest Calculation Basis, and Revenue Recognition Method.

Subsequently, when you create a product using the product template, you must assign one of the seeded quality values for each seeded quality in the associated product template.

Define Template Quality Name and Value

Optional

You must define Template Quality names first and then define and associate values with the names. Template qualities are used when you define product templates and the values associated with the template qualities are mandatory and become fixed at the time you define your product template.

The purpose of these qualities is to allow you to define a host of product templates that share a common set of qualities. For example, if you have several products that originate out of specific geographical areas, such as USA and UK, you can define a template quality named "location" with two values of USA and UK. When you subsequently define product templates, you can define separate templates, one using the USA as the contract origination location and the other using the UK.

This is important because different accounting laws can apply to different contracts.

You can also use template qualities to group the types of items you offer according to categories. If your enterprise leases both heavy equipment and computer equipment, for example, set up a template quality called "asset category" with two values: "heavy equipment" and "office equipment."

Note: Because they are not linked to any processing functionality, you can set up as many template qualities as you want.

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Template Qualities page.

    The Create Template Quality page appears.

  2. Enter the Name and Description of the template quality.

  3. Set the Effective From and, optionally, set the Effective To dates for the quality.

  4. Enter the template quality value name to associate a value with the quality.

  5. Optionally, enter the description of the template quality value.

  6. Set the mandatory Effective From and, optionally, the Effective To dates.

  7. Click Apply.

    You can add as many values as necessary. You can view all the quality values associated with the template value by clicking List of Template Quality Values.

    It is important to remember that every template quality you configure must have at least one value associated with it. Also, the values of a template quality are assigned when setting up the product template and not when setting up a product. For more information, see Define a Product Template.

Define Qualities Name and Values

Optional

You can define Quality names and then define and associate values with the those quality names. These differ from the template qualities in that the valid values are determined at the time you define the product.

Whereas with template qualities you define some qualities for your product template--such as location, asset category, and so on--which are unchangeable at the time you define products, you can also define some qualities that allow the values to be set at the time the product itself is being defined.

Just as you defined "asset category" as a template quality -- meaning that either "heavy equipment" or "office equipment" is always a fixed pre-defined value prior to creating a product -- you can set up a "sub-asset category" quality at the product level so you could further define the type of heavy equipment or office equipment to be leased at the time you create the product. This is simply a further classification of the product.

If you set up a product quality called "sub-asset category," for example, you might create values such as trailer, tractor, copier, computer, or fax machine.

Product qualities must be associated to a product template, but the value of the product quality can not be chosen until you are creating the product.

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Qualities page.

    The Create Quality page appears.

  2. Enter the Name and Description of the quality in the appropriate fields.

  3. Set the Effective From and, optionally, the Effective To dates for the quality.

  4. Enter the quality value name and optionally, the description to associate the value with the quality.

  5. Set the mandatory Effective From and, optionally, the Effective To dates for the quality value.

  6. Click Apply.

    Create as many qualities with associated values as you need to define your products.

Define a Product Template

Once you have defined your template and product qualities, you must define product templates, which are required when defining a product.

Product templates can include template qualities and product qualities. The differences between template qualities and product qualities are:

Prerequisites

Definetemplate and product qualities prior to setting up a product template.

Steps

Perform the following steps:

  1. Click Create in the Product Templates page.

    The Create Product Template page appears.

  2. Enter the Name and Description of the product template to create.

  3. Set the Effective From and, optionally, Effective To dates for the template.

  4. Select a template quality to associate the applicable template quality and value combination to a particular product template.

    Note: There is a separate template quality for each value that you associated with it. Choose the template quality based upon the value to be associated with the template.

    Add as many template qualities as you want from the list. To delete one or more of these, select the quality and click Remove.

  5. In the Qualities region, select the quality to associate with the product template. This association enables the value of the quality to be determined at the time of product creation.

  6. Click Apply.

    Add as many product qualities as you want from the list. To delete one or more of these, select the quality and click Remove.

    When you define a product, you are required to enter a product template name.

Define a Product

After defining product templates, product qualities, and options, you can define your financial products. Financial products are required for all contracts. At the time of contract origination, you must select a product. The options and their defined values, which are associated with the product, populate the terms and conditions page during contract origination. You also can assign stream types to a product for accrual. Additionally, you can define non-financial considerations such as location.

Prerequisites

All product templates, qualities, and options you intend to use must be pre-defined.

You also must define your accounting template set prior to defining a product because you are required to select an accounting template set when you set up your products.

Steps

Perform the following steps:

  1. Click Create in the Products page.

    The Create Product page appears.

  2. Complete these fields:

    • Name: Type the name of the financial product.

      You may want to search for and select the Product Template and Accounting Template Set first, then name this product similarly, as a subset of its parent categories.

    • Description (optional): Type a brief description of the product.

    • Product Template: Search the existing product templates and, from the list, choose the product template to associate with the product. (Only ONE product template can be associated with a product.)

    • Accounting Template Set: Search the existing accounting template sets and, from the list, choose the template set to associate with the product.

      In this field, you determine what kind of accounting entries are needed for this product.

    Important: It is extremely important that all the possible accounting entries that might be used during the life of the contract be included in the accounting template set. For more information, see Define Accounting Template Sets.

    • Select a financial product as the reporting product. The reporting product is the basis for both accounting in the secondary ledger for the contract/asset/investor agreement transactions, and for generating the Multi-GAAP Adjustment Report.

    • Effective From/Effective To: Set the valid dates for the life of the product. The Effective From date is mandatory, while the Effective To date is optional.

    Important: Note the following conditions on defining a financial product:

    • The primary product and associated accounting template set and stream generation template are the basis of downstream transaction processing and accounting in the primary ledger.

    • The reporting product and associated accounting template set and stream generation template are the basis of dow stream transaction processing and accounting in the secondary ledger.

    • The following conditions apply to the selection of a reporting product that is used for Multi-GAAP accounting:

      • The revenue recognition method of the primary and the reporting product must be the same.

      • The interest calculation basis of the primary and the reporting product must be the same.

      • If the book classification of the primary product is Lease (Direct Finance, Operating Lease, or Sales Type Lease), the book classification of the reporting product must be the same.

      • If the book classification of the primary product is Loan, then the book classification of the reporting product must also be Loan.

      • If the book classification of the primary product is Revolving Loan, then the book classification of reporting product must also be Revolving Loan.

      • The pricing engine of the stream generation templates associated with the primary and reporting products must be the same.

  3. Click Save and Add Details to enter quality values. Otherwise, click Apply to add details later.

  4. To add quality values to the product, click the Quality Values subtab in the Product details page and click Update.

    Note: You defined qualities at the time you configured your product templates. At this time you must associate a value with each associated quality.

  5. Choose the value to associate with the product quality.

  6. Click Apply.

  7. Click the Accrual Streams subtab in the Product details page to associate stream types with the product for accrual.

    The Accrual Streams subtab lists the stream types that you have already associated with the product for accrual. The table shows the hypertext-linked stream type name, and whether the stream type is set to accrue.

    Note: If you chose the Depreciation stream type, you should not mark it for accrual while defining a product because Oracle Assets, not Oracle Lease Management, creates the depreciation accounting entries.

  8. Click Update to add new stream types for accrual and modify the accrual for existing stream types.

    For Lease financial products, after streams have been set to accrue, you can subsequently change the accrual.

  9. Click the name of a stream for which you want to change the accrual flag.

    The Accrual Stream Details page appears, displaying a selection box labeled Accrue, for setting the accrual flag. Available values are Yes, accrue, or No, do not accrue. Then click Apply.

    After you receive a successful update confirmation, you may choose List of Accrual Streams. The stream that you changed now displays the updated accrual flag (Yes or No) in the Accrue field.

  10. Repeat the steps for each stream type accrual flag setting you want to change.

Validate Product Changes

You can validate changes made to a financial product by selecting Validate Product. Lease Management generates a validation report on the following parameters:

  1. That book classification of the stream template and the product match.

  2. Accounting template has defined all accrual streams on a product.

  3. If an accounting template has been defined for a primary stream purpose, the template has also been defined for a dependent stream purpose

  4. All streams on the stream generation template with the attribute Billing have an accounting template with a transaction type of Billing and Credit Memo.

Define Invoice Group Parameters

The following topics describe how to setup an Oracle Lease Management invoice group and its objects:

About Invoice Groups

An invoice group is a grouping of the parameters which determine exactly what appears on an Oracle Lease Management invoice. Every invoice in Oracle Lease Management uses a particular invoice group, which impacts the invoice's appearance.

Each invoice group consists of one or more invoice types. Each invoice type consists of one or more invoice line types. Within each invoice line type, you can associate one or more billing types.

After creating an invoice group, with its component invoice types and invoice line types, you must update the invoice group to define a default invoice line type for billing types that are not specifically assigned to an invoice line type.

About Modifying Invoice Features

Invoice features that you can modify include:

About Creating and Adding Invoice Objects

Each Create page lets you create one object at each level. Starting from the Create Invoice Group page, as you complete and submit the parameters on each page, you proceed automatically to the Create page at the next level down.

This fast-track approach lets you create one invoice group, consisting of one invoice type and one invoice line type.

To add extra objects after a fast-track creation, you must navigate to the appropriate level of your invoice group, and use one of the following areas.

About Updating Invoice Groups and Objects

The top of each Update page consists of the same fields as its corresponding Create page. If you have to use any Update page to add to your invoice group, type or line type, you can refer to the steps in the corresponding Create page. The main difference is that you complete each Update page processing by clicking the Update button, rather than a Create button.

The sections that follow describe the steps for the Create pages only.

Create an Invoice Group

Required

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Invoice Group page.

    The Create Invoice Group page appears.

  2. Select the 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.

  3. Enter the Name, and optionally, the Description.

  4. Use the Multi-Contract Invoices box to determine either:

    • To have one contract per invoice.

    • To have a multiple contracts per invoice.

      To combine contracts on an invoice, check the Multi-Contract Invoices box, otherwise leave it blank.

  5. Optionally, enter the effective dates for the invoice group.

  6. Click Continue to add invoice types and invoice line types.

Creating Invoice Types

Perform the following steps:

  1. In the Create Invoice Type page, enter the Name and optional Description.

  2. Check the Provide Contract Detail box to specify the contract number on the invoice line, otherwise leave it blank. The effect of leaving this box blank is to combine the same billing type from multiple contracts into one invoice line.

    For example, without contract detail, rents for contracts 001,002 and 003 are grouped together and displayed as one rent amount.

  3. Check the Combine Assets box to combine the same billing type per contract into one invoice line, otherwise leave it blank.

    For example, if contract 001 has two assets, both of billing type Rent, checking the Combine Assets box results in one invoice line for contract 001 with billing type Rent.

    Note: If you combine contracts into a single line for every billing type, then you must group all assets together. In other words, if you have not selected the Provide Contract Detail box, then you must select the Combine Assets box.

The following table shows allowable box combinations for Provide Contract Detail and Combine Assets.

Allowable Combinations of Selections
Provide Contract Detail Combine Assets
Unchecked Checked
Checked Checked
Unchecked Unchecked

Creating Invoice Line Types

To associate your own billing types to invoice lines, you must have created billable streams: streams with the attribute Billable set to Y. For more information, see Set Up Stream Types.

Perform the following steps:

  1. In the Invoice Line Type region of the Create Invoice Type page, enter a Sequence Number for the invoice line.

  2. Enter a Line Name for the line.

    The line name appears on the invoice and identify the invoice line.

    Additionally, the Streams panel appears, where you associate one or more billing type streams to an invoice line.

    For example, you could create an invoice line with the line name Lease Payment, and associate it with the two billing type streams Rent and Service & Maintenance.

  3. For each stream that you want associate to an invoice line, click Streams beside the next empty Stream Name entry, and select your billing type stream from the list that appears.

  4. If you have to associate more than one billing type per invoice line, click the button to Add Another Row, and repeat step 3.

  5. If required, repeat step 4 until there are no more billing type streams to associate with the invoice line.

  6. Click Finish.

Specify a Default Invoice Line Type

Required

Each invoice group must have an default invoice line type for the billing types not specifically assigned to an invoice line type.

You cannot specify the default invoice line type for an invoice group as you are creating the invoice group. You must first create the invoice group, together with its constituent invoice types and invoice line types - only after you have created the complete invoice group can you specify which invoice line type should be the default for the invoice group.

Prerequisites

You must have created an invoice group, with at least one invoice type and invoice line type.

Steps

Perform the following steps:

  1. On the Invoice Group page, search for the invoice group to specify a default invoice line type.

  2. In the Results area, click the hypertext-linked Name of your selected invoice group.

    The Update Invoice Group page appears.

  3. Select the Default Line Type.

  4. Click Apply.

Define Invoice Messages

Steps

Perform the following steps:

Set Up Interest Rates

Required

Oracle Lease Management supports various kinds of interest calculations for lease contracts, such as those for disbursements made prior to contract activation, or loan contracts.

You can define your own interest rates, which you can then use in many Oracle Lease Management transactions.

The parameters for the interest rate are:

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Interest Rates page. The Create Interest Rate page opens.

  2. Enter the Interest Rate Name.

  3. Choose the Index Frequency (daily, weekly, monthly, quarterly, yearly, and so on).

  4. Optionally, enter a description.

  5. In the Interest Rate Values region, specify the effective dates.

    You can optionally leave the Effective To field blank if you do not want an ending effective date.

  6. In the Percentage field, enter the rate.

  7. Click Apply.

Set Up Usage Based Billing

The following table describes set up steps that must be completed before Usage Based Billing (UBB) used in Lease Management.

Usage Based Billing Set Up
Set Up Step Description Application
Set Up Usage Item Usage items are created in Oracle Inventory. Setups for usage items are the same as for a standard Lease Management inventory item. Oracle Inventory
Set Up Price List Price lists are required for usage billing on a contract. Price lists are defined in Oracle Advanced Pricing, but can also be defined in Oracle Service Contracts Manager as the Service Contract interface inherits Advanced Pricing pages. Oracle Advanced Pricing
Oracle Service Contracts Manager
Set Up Counters and Counter Groups For UBB items, you can derive each billing amount directly from a single usage counter. However, if you want to calculate billing by leveling the counter readings across individual counters, you must set up one or more consolidated counter groups. Oracle Service Contracts Manager
Set Up Consolidated Counters Counters are required to be defined because they record usage. Counters across multiple assets or contracts are grouped together to determine the excess charges across the group of counters for usage billing. Oracle Service Contracts Manager
Set Up Accounting Template You must create an accounting template for the product with a stream type of Usage. Lease Management

Define Late Charges Parameters

Required

These topics describe the setup of Oracle Lease Management late charge parameters:

About Late Charge Parameters

When a lessee or borrower does not pay an invoice on or prior to the due date, Oracle Lease Management can assess a penalty. There are two ways to calculate the penalty. The first is a one-time fee charged after a grace period, and the second is an interest charge on the payment. You can choose to use one or the other, or both.

After Oracle Lease Management assesses the late charge or late interest charge, it sends the amount to Oracle Receivables, which then sends an invoice to the lessee/borrower.

The setup process uses these terms:

Late Charge Policy: Grouping of terms and conditions for late charges and late interest charges.

Late Charge: One-time fee assessed to a lessee/borrow for not paying an invoice. This can be a flat-fee or a percentage of total open invoices past due.

Late Interest Charge: An interest charge on a late payment.

Adder: The amount charged over the index rate. For example, if the index rate is prime, and you are charging prime plus 1%, then 1% is the adder.

Interest Type: This is either Fixed or Variable.

Create Late Policies

Required

You can create a late interest policy, a late charge policy, or a late interest and late charge policy. These sections outline the steps:

Prerequisites

Your interest rates must be set up. See Set up Interest Rates.

Create Late Interest Policy

Required

Late interest is calculated for past due invoices when the payment is received. This rule assesses late interest to the payment that can be either fixed or variable.

Late interest computation uses this formula:

Late interest = ((Invoice Amount * Rate)/Number of days in the year)* Days Late 


Where:
Days Late = Date Invoice Paid - Due Date of the Invoice 


Or 


Days Late = Date Item Paid - (Due Date of Invoice + Grace Period)

If the late interest is less than the minimum late interest, no interest is assessed. If the late interest is more than the maximum, then the maximum amount is used.

Interest is assessed using the “rate type” associated with the policy. If the rate type is fixed, use the defined rate. If the rate is variable, use the index code associated with the late charge product to look up the rates from the rate table. The rate is then equal to the rate from the index plus an adder.

The following steps describe how to set up late interest rules by defining the parameters on the setup pages.

Steps

Perform the following steps:

  1. Click Create in the Late Policies page. The Create Late Policy page opens.

  2. Select the 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.

  3. Enter the late policy name.

  4. Select the location.

    For example, Germany. (This could be a state or a country.)

  5. Enter the description.

    For example, Late Charges.

  6. Select a Late Policy Type from the list.

    Choices include Late Charge, Late Interest, and Late Charge and Late Interest.

    If you choose Late Charge, then complete only that section. If you choose Late Interest, then complete only that section. If you choose both, then complete both sections.

  7. In the Late Interest section, enter the Maximum Interest.

    This is the maximum amount assessed as a late interest charge.

  8. Enter the Minimum Interest.

    This is the minimum amount assessed as a late interest charge.

  9. Select the Rate Type from the list.

    Choices include Fixed Rate or Variable Rate. If you selected Fixed Rate, then enter the Late Interest Rate (%). For example, 11%.

    If you selected Variable Rate, then select the Index Code from a list of values (these are the Interest Rates you set up earlier). Then enter an Adder Rate, for example, 1.0.

  10. Enter the Grace Period. For example, 10 days.

  11. Enter the Minimum Balance. For example, $10.

  12. In the Billing Types section, select any exempt billing types.

  13. Click Apply.

Create Late Charge Policy

Required

Late charges can be a flat fee or a percentage of the total invoices past due. For a contract, if the late charge is a flat fee, no computation is needed. If, however, the late charge is a percentage of the total due, then you must compute the charge. Compare the computed charge with the minimum and maximum charge. If it is less than minimum, use the minimum, or if it is more than the maximum, use the maximum.

These steps describe how to set up late charge rules and define the parameters on the setup pages.

Steps

Perform the following steps:

  1. In the Late Charges section, select the Late Charge Type.

    Choices include Fixed Amount or Percentage.

  2. If you choose percentage, enter the Late Charge Rate (%).

    For example, 10%.

  3. If you choose fixed, enter the Late Charge Amount.

    For example, $25.

  4. Enter the Grace Period.

    The Grace Period is the period during which a late charge is not assessed. For example, 10 days.

  5. Enter the Maximum Late Charge.

    This is the maximum amount that can be assessed as a late charge.

  6. Enter the Minimum Late Charge.

    This is the minimum amount that can be assessed as a late charge.

  7. Enter the Minimum Balance.

    If the amount due is less than the minimum amount, no late charge is assessed.

  8. In the Billing Types section, select any exempt billing types.

  9. Click Apply.

    Note: To create both late interest and late charge policies, select that option in the Late Policy Type field, fill in the information appropriate to each section, then click the Apply button. Continue with the preceding steps.

Define Cash Search and Cash Application Rules

These implementation topics describe the setup of Oracle Lease Management cash search and application rules:

About Cash Search and Application Rules

Oracle Lease Management includes an automated means of applying receipts to invoices. To use automated application of receipts, you must define rules to handle situations where there are:

The two main parts of defining rules for handling cash receipts are to:

Define Invoice Search Rules

Required

Search rules for invoices apply to lockbox processing and manual receipt of payments to help you automate the matching of receipts with invoices. For example, search rules can help you handle receipts that you cannot automatically apply to invoices, customers, or contracts.

In addition to search rules, cash rules help you apply a cash receipt to a customer's account or outstanding invoices. For more information, see Define Cash Application Rules.

Search rules for invoices in Oracle Lease Management comprise mainly of user-defined rules. Search rules make use of billing types that you can combine to form addition or subtraction statements—also known as combinations. Billing types are the same as stream types. Examples of billing types include: rent, tax, insurance, late charges, bank fees. Oracle Lease Management includes many seeded billing types from which you can define search rules. You can also define your own billing types and include them in your invoice search rules. For more information, see Define Streams and Pricing.

To define your own rules, include one or more billing types to form a combination. When including multiple billing types to form a combination, you are adding or subtracting billing type values to attempt to find possible matching values with a receipt. For example, rent and late charges are two examples of billing types that you can combine to use in a rule. Upon execution of that rule's combinations, the resulting value might match or explain why a cash receipt is different from the original invoiced amount which might not have included the late charges. You can have multiple search rules and you can prioritize the sequence in which each rule is evaluated.

Prerequisites

Set up your custom billing types, if any.

Steps

Perform the following steps:

  1. Click Create in the Search Rules page. The Create Search Rule page opens.

  2. Select the 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.

  3. Enter the name and description for the search rule.

  4. In the Search Type field, choose either:

    • Billing Type Combination: Use only stream types in the statement.

    • Total Minus Combination: Use the total invoice amount less the combination of billing types.

  5. In the Sequence field, enter the priority number in which this rule applies.

  6. In the Combinations region, select the applicable billing type for the search rule.

  7. In the Plus/Minus column in the first row, select either Plus or Minus to add or subtract the billing type that you selected.

  8. To add or subtract additional billing types for this rule, click the Add Another Row button and repeat steps 6-7 on the additional rows.

  9. Click Apply.

Guidelines

Before creating search rules, verify that you have set up any custom stream types to include in your rules.

See Also

Define Streams and Pricing

Edit Search Rules

Optional

You can change your invoice search rules from time to time. For example, you might have added some new billing types to accommodate different or new taxes, fees, or insurance. You can locate rules by specifying either the rule name or the search type.

Prerequisites

None

Steps

Perform the following steps:

  1. On the Search Rule page, perform a search to locate the rule to edit by doing either:

    • In the Name field, enter full or partial search criteria and click the flashlight icon.

    • In the Search Type field, choose either Billing Type Combination or Total Minus Combination.

      Billing Type Combination displays rules that use only billing types in the statement.

      Total Minus Combination displays rules that use the total Invoice amount less the combination of billing types.

  2. Click Go.

    In the Results area, matching rules appear.

  3. To edit a rule, click the rule name in the Name column.

    The Update Search Rule page appears.

  4. To remove a billing type from your combination:

    1. In the Remove column, select the box next to the billing type.

    2. Click Submit.

  5. To change the addition or subtraction of a billing type value, choose either Plus or Minus in the Plus/Minus column.

  6. To add a billing type combination that follows the existing rule's combination:

    1. Click the Create Combinations button.

      The Create Combination page opens.

    2. In the first row of the Plus/Minus column, choose either Plus or Minus to add or subtract the billing type that you specify in the following step.

    3. On the first row in the Billing type column, click the Search icon.

    4. Search for and select a billing type.

    5. Click OK.

      The selected billing type appears in the Billing Type column.

    6. To add or subtract additional billing types for this rule, repeat steps b through e on the additional rows.

    7. Click Apply.

      The additional billing type combinations appear after the existing ones.

Define Cash Application Rules

Required

The topics in the Define Cash Application Rules section include:

Cash application rules define how to apply a receipt to an invoice where:

Use cash application rules to apply cash receipts in the following situations:

About Cash Application Terms in Receivables

Various terms refer to the flow of cash receipts in Receivables. These terms include:

Setting Up Cash Application Rules

You can set up cash application rules at either the organization or the contract level. You can define more than one cash application rule for each operating unit. During the implementation of Oracle Lease Management, the first cash application rule that you create becomes the default cash application rule. You can update but not delete this rule.

You can create as many cash application rules as you want. The objective in doing this is to be able to apply different cash application rules for different contracts.

When you author a contract, you can associate any cash application rule, even the default cash application rule, with the contract. If you do not explicitly associate a cash application rule with the contract, the default rule is implicitly associated with the contract, then Lease Management uses the default cash application rule associated to the operating unit to apply cash.

Applying Cash Application Rules

Cash application rule is used to auto apply receipt to invoice lines when you create and/or apply a receipt through:

Define Main Cash Application Rule Components

Required

Note: The first cash application rule that you create becomes the default cash application rule. You can update but you cannot delete this rule.

Prerequisites

Set up streams.

Steps

Perform the following steps:

  1. In the Cash Application Rules page:

    • If you want to create a cash application rule, click Create.

    • If you want to edit an existing cash application rule, then search for the rule using one or more of the following search parameters: Rule Name, a range of dates for the Start Date, a range of dates for the End Date.

    • In the Default Rule field, you may also specify that you want all rules (ALL), just the default rule (YES), or all rules except the default rule (NO).

    • Click Go.

Rule Header

Whether you are creating or editing a cash application rule, the fields to define are almost identical, whether they appear on the Create Cash Application Rule page or the Update Cash Application Rule page.

  1. Select the 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.

  2. Enter a name and description for the rule.

  3. Enter a Start Date for the rule.

  4. Optionally, enter an End Date for the rule.

Receipt Mismatch Rules

Receipt mismatches occur when you identify the customer but cannot locate an invoice against which you can apply a payment.

  1. Select one of the three choices for receipt mismatches:

    • Move Receipt to On Account

      Apply receipt to a customer without applying to any invoices.

    • Apply to Oldest Invoices

      Apply receipt to the customer's oldest outstanding invoices first.

    • Apply to Newest Invoices

      Apply receipt to the customer's newest outstanding invoices first.

Underpayment Rules

  1. In the Cash Application Rules section, in the Underpayment area, select one of the three methods for applying underpayments against a customer's account:

    • Apply based on billing type

      Decide the sequence or priority in which to apply cash to billing types. You can specify sequence to one or more billing types. Cash receipts are fully applied to each billing type in the order you specify until the cash receipt is fully applied.

      Note: If you choose Apply based on billing type as your underpayment rule, then, after you click Create or Update, the Payment Order page appears, and you must create or edit the payment sequence of billing types.

      Note: For more information, see Define Billing Type Payment Order for Underpayments.

    • Prorate for specific lines on invoice

      Decide which billing types to prorate.

      Note: If you choose Prorate for specific lines on invoice as your underpayment rule, then, after you click Create or Update, the Prorate Transactions page appears, and you must specify the streams to prorate.

      Note: For more information, see Define Streams to Prorate for Underpayments.

    • Move cash to unapplied

      Do not apply receipt to invoice or on account; place receipt in unapplied.

Overpayment Rules

  1. In the Cash Application Rules section, in the Overpayment area, select one of the three methods for applying overpayments:

    • Apply to customer balance

      Apply cash receipt to customer's on account balance rather than to an invoice.

    • Move cash to Unapplied

      Assign the cash receipt to the customer without applying it to an invoice or putting it on account. Use this option when you know who the customer is but you have not decided whether to apply it to an invoice or On Account.

Tolerance Rule

When you define your cash application rules, you also must indicate how to handle differences between the invoiced amount and the amount received. If this difference in amount is within the amount of tolerance that you specify, then the cash receipt applies to the invoice. The tolerance is expressed as a percentage of the invoice amount. The amount of tolerance that you specify applies to all cash receipts and invoices for all customers.

For example, suppose your invoice amount is $1000 and you set your tolerance percentage to 2 percent. This would mean you would accept a cash receipt that varies as much as 2 percent of $1000; that would include a range from $980 to $1020.

Note: To apply cash receipts, the amount that you received must be within the tolerance.

  1. In the Cash Application Rules section, in the Tolerances area, specify the Percentage of tolerance allowed for amount- the percentage of deviation from the agreed-upon termination price that you are willing to accept to terminate the contract.

Termination Quote Tolerance Rule

When you define your cash application rules, you also must indicate how to handle termination quotation tolerances. When a lease terminates for the balance due, you would typically agree upon a final balance due and a deadline. In the event that the final payment or date varies from the agreement, you can indicate the number of days past the deadline or Quote Valid Date during which you accept the final agreed-upon amount. This rule applies only to termination quotes.

For example, if you set the number of days past the deadline to 5, you accept payment past the deadline date for 5 days.

  1. In the Cash Application Rules section, in the Tolerances area, specify the Allowable days past the termination quote date-the number of days past the agreed-upon deadline date for which you accept cash receipts.

  2. Define Number of Days to Hold Advance Payments: this number defines the number of days until which the advance receipt shall not be applied to already open invoices.

Define Billing Type Payment Order for Underpayments

During the creation or updating of a cash application rule, if your Underpayment rule is Apply based on billing type, then, after you click Apply, the Payment Order page opens and shows a grid with stream names and fields to enable you to enter a sequence number next to each stream name.

  1. Enter values as follows:

    1. Next to each stream name in the Sequence Number column, enter the priority or sequence in which to apply underpayments.

      The smaller the sequence number is a higher priority; 1 is the highest priority, for example.

    2. Leave the Sequence Number field blank next to those stream names to which you do not want to apply receipts.

    3. If you have multiple pages of stream names, then navigate to each page by clicking the Next and Last links.

    4. Click Apply.

Define Streams to Prorate for Underpayments

During the creation or updating of a cash application rule, if your Underpayment rule is Prorate for specific lines on invoice, then, after you click Apply, the Prorate Transactions page opens and shows a grid with stream names and fields to enable you to prorate each stream name.

  1. Enter values as follows:

    1. Next to each stream name in the Prorate column, select whether to prorate the stream in underpayments.

    2. Leave the Prorate box empty next to those stream names for which you do not want to prorate receipts.

    3. If you have multiple pages of stream names, then navigate to each page by clicking the Next and Last links.

    4. Click Apply.

Define Default Receipt Method

In Lease Management, you need to associate a default receipt method to payment method credit card, and bank account to process payments made through self service and Customer service (Lease Center). You can associate one receipt method to each payment method.

To associate receipt method to payment method, perform the following tasks:

  1. In the Search region of the Default Receipt Methods page, enter the applicable operating unit and click Go. The results display the available payment methods and existing default receipt methods.

  2. Click Update and select default receipt methods for each payment method.

Define Customer Service Setups

The following implementation task affects the setup of Oracle Lease Management customer service rules:

Define Service Fees

Optional

In the process of servicing contracts in Oracle Lease Management, a multitude of events can occur between the customer service representative and the lessee. Oracle Lease Management enables you the ability to charge service fees for these events, in accordance with your business rules.

These event types are seeded in Oracle Lease Management as service fee types and, during implementation, you can choose to enable any or all of these fees. For example, you might want to charge a fee for events such as a transfer of fees, invoice content change fees, audit letter request, and so on. To charge a fee for events, you must define your charges, the effective dates, and so on.

Note: In Oracle Lease Management, all available service fee types are seeded.

Steps

Perform the following steps:

  1. From the Service Fees page, click Create.

    The Create Service Fee page opens.

    Note: All the service fees you have created, along with the pertinent details, appear on the Service Fees page.

  2. Select the 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.

  3. From the list of values, choose the Name of the service fee to enable.

    This seeded list includes values such as Service Fee, Document Request Fee, and Restructure Request Fee.

  4. Add a description of the service fee.

    This is optional, but serves to further identify the service for which you are charging a fee.

  5. Enter the amount to charge for the service.

  6. Enter the Effective From date and, optionally, enter the Effective To date.

  7. Click Apply.

Guidelines

You can filter your search for already created service fees by selecting either Active or All in the View field and clicking the Search icon. Selecting Active relegates your search to only those service fees containing Effective To dates that have not expired.

Define Party Contact Roles

Required

Vendor program agreements make use of party contact roles. You must define all party contact roles your company uses for vendor organizations since there are no seeded party contract roles. The party contact roles that you define become available on the list of values on the Create Party Contact page in the vendor agreements area of Oracle Lease Management.

Examples of party contact roles include: Billing Contact, Lease Vendor, Contract Administrator, Contract Manager, Contract Officer, Credit Analyst, Customer Contact, Customer Service Representative, Dealer, Inspector, License Sales Representative, Salesperson, Shipping, and Signatory.

To set up new user-defined parties, see Set Up New User-Defined Parties For Lease Contracts and Agreements.

Steps

Perform the following steps:

  1. Log on as system administrator.

  2. Select the Contracts Manager role.

  3. Navigate to Setup > Contract > Categories and Sources and select Define Role Sources.

  4. Click the right arrow icon, and click the Open button.

  5. On the Party Sources form, perform a query on Lease Vendor.

  6. Click the Contact Sources tab.

  7. Specify the Contact Role, Source, Constrained, Intent, Start Date, End Date, and Access Level.

  8. Click the Save icon.

Set Up Termination Quotes for Repossession

Set Up Termination Quotes for Repossession Overview

Before Termination Quotes for Repossession can be processed, you must complete the following setup tasks:

Termination Quotes for Repossession Prerequisites

Before you can perform setup tasks for Termination Quotes for Repossession, you must have completed the following:

Set Profile Option for Repossession

To enable the creation of a Termination Quote for Repossession for a loan in Lease Management, the OKL: Allow Manual Termination Quote Create and Update profile option must be overridden.

Set Up System Options for Termination Quotes for Repossession

To set up system options for Termination Quotes for Repossession, navigate to Setup > System Options > Operational Options > Asset Return Options > Termination Quotes for Repossession.

The Asset Return Options region is read only. Values in this region default from Authoring Options. Enter the options for your loan repossession.

The following table describes system option setup details for Termination Quotes for Repossession.

Field Description Required or Optional
Asset Addition Corporate Book Corporate book setup; defaults from Authoring Options region. This is read only. Required
Reporting Product Asset Book Defaults from Authoring Options region. This is read only. Optional
Tax Asset Book 1 Primary tax book for the repossessed asset Required
Tax Asset Book 2 Secondary tax book for the repossessed asset Optional
Asset Key Fixed Assets asset key for the repossessed asset Optional
Depreciate on Asset Return Determines whether the asset should be depreciated in Fixed Assets after repossession. Select the checkbox to enable this feature. Required
Fixed Asset Location The location of the asset recorded in Fixed Assets. Required
Asset Cost Formula Evaluates the return value of the repossessed asset. The seeded formula, ASSET_RETURN_AMOUNT, calculates the outstanding principal balance of the asset. Optional

Set Up Accounting for Termination Quotes for Repossession

Before the loan repossession process is enabled in Lease Management, you must complete all accounting set. For more information on setting up accounting for termination quotes for repossession, see Accounting Integration, Oracle Lease Management User's Guide.

To set up accounting for termination quotes for repossession, see Accounting Options and Account Codes Derivation.

Define Remarketing Functionality

When setting up your remarketer functionality in Oracle Lease Management, you must do the following:

Create Remarketer Assignments

Required

When the asset comes off-lease, it is recorded in the Asset Return Process. Within this process, the system assigns a Remarketer to the asset. This person is eventually responsible for the disposal of the asset. When setting up Oracle Lease Management, ensure that the remarketer is set up in Oracle Human Resources and has been associated with a remarketing team in Oracle Foundation, as you won't see the remarketer's name in the list of values until that time.

Prerequisites

Define item catalogs in Oracle Inventory. For more information, see Oracle Inventory User's Guide.

Define your remarketer information in Oracle Foundation. For more information, see Oracle Foundation User Guide.

Steps

Perform the following steps:

  1. Click Create in the Remarketer Assignments page. The Create Remarketer Assignments page opens.

  2. Select the 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.

  3. Select a remarketer from the list of values.

  4. Select an Item Category to associate with the remarketer from the list of values.

  5. Enter the Effective From and, optionally, the Effective To dates.

    This is the period of time during which the remarketer is responsible for this item category.

  6. Click Apply.

Define Repair Costs

Required

To choose the repairs and associated estimated costs for your assets, you must:

After the information is in the table, you can use it during the asset disposition process. You can update this table.

Note: Repair costs are defined in the ledger currency of the ledger.

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Repair Costs page. The Create Repair Costs page opens.

  2. Select the 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.

  3. Enter the Repair Type. For example, Windshield Replacement.

  4. Enter the Description. For example, “Replace broken windshield.”

  5. Enter the cost associated with the repair. For example, $325.00.

  6. Select the Repair Type and click Remove to remove the repair type.

  7. Click Apply.

Define Lease Income Accrual Rules

By default, every active contract accrues income and expenses throughout its life. As part of the Oracle Lease Management setup process, you must define the rules around which the accrual of income and expenses against a contract is placed on hold.

The rule parameters are:

You can use one or both when setting up your parameters.

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create New Version in the Accrual Rules page.

  2. Enter your accrual rule by choosing the following from the lists:

    • Logical Operator (and, or)

      If you use “and,” accrual stops when both conditions are met.

      If you use “or,” accrual stops when either of the conditions are met.

    • Left Parenthesis

      Use the parenthesis to set up the rule as a formula.

    • Operand

      Limit Days: Accrual stops after a specified number of days elapses past the payment due date. For example, you can set up the rule to stop accrual for an outstanding bill of 90 days.

      Bills Unpaid: Accrual stops after a specified number of bills are left unpaid. For example, you can set up the rule to stop accrual after five bills are unpaid.

    • Operator

      Use the operators to define the formula (>, <, =, >=, <=).

    • Literal

      Specify the limit of days or the number of bills outstanding that the system should accept before stopping accrual, for example, 90 days or five billing periods.

    • Right Parenthesis

      Use the parenthesis to set up the rule as a formula.

    • Effective From date

      Specify a date from which the accrual rule is effective.

  3. Click Apply.

Define Loss Provision Rules

Loss provisions let you apply estimated or tentative losses against contracts.

Loss provisions make use of aging buckets, which you should have set up in Oracle Receivables. You must set loss provision rates, which associate aging buckets with loss provision amounts.

For information on creating loss provisions and applying loss provisions to products, see the Oracle Lease Management User's Guide.

Set up Loss Provision Rates

Required

Loss provision rates are the percentages that you associate with aging buckets to calculate loss provision amounts.

Prerequisites

Set up Loss Provision aging buckets. See Define Aging Buckets.

Steps

Perform the following steps:

  1. Use the Loss Rates page to search for and select the aging bucket with which to associate a set of loss provision rates.

  2. Click Update.

  3. On each bucket line, enter a value in the Loss Rate column.

    Note: Enter the percentage as a whole number: Enter 5 for five percent. You can enter any number decimal places.

  4. Click Apply.

Define Off-Lease Asset Amortization Rules

When an asset comes off-lease and is retained, the remaining book value continues to be written off in the corporate books as per business rules. In some instances, a holding period could be associated with certain categories of assets. These holding periods are the periods used to determine when to stop and then restart the depreciation process of an asset. Depreciation can be deferred based on business rules. If the holding period is not defined for an asset, depreciation continues as it had prior to coming off lease.

Define Off-Lease Asset Hold Periods

Required

In Oracle Lease Management, you must define the hold period days for your off-lease assets.

Prerequisites

Define asset key flexfield.

Define asset category flexfield.

Define asset categories.

For more information, refer to the Oracle Assets User Guide.

Steps

Perform the following steps:

  1. On the Off-Lease Amortization Hold Periods page for the initial setup, click the Load Asset Combinations button to view all of the asset category/asset book combinations as entered into Oracle Assets. This populates the Oracle Lease Management page with all of the categories currently set up in Oracle Assets with a book classification of corporate.

  2. Check the Remove box to delete any unwanted asset combinations. They are removed from Oracle Lease Management only, not from Oracle Assets.

  3. In the Load Asset Combination page, select the applicable corporate book for the asset category/asset book combination.

  4. Click Apply.

Guidelines

If you have to make additional entries into your off-lease asset hold periods after you have entered all the hold and depreciate methods information, click the Create button. This lets you add individual records to the table without affecting the entries you have already defined. See the following section for details.

Do not click Load Asset Combinations again, unless you want to import all the combinations again from Fixed Assets, which overwrites the information you have already input.

Note that you must update the asset category description for the asset category that appears on the Off-Lease Asset Hold Periods page. For more information, see Define Off-Lease Asset Hold Periods.

Create Asset Category/Asset Book Combinations

You can create your own asset combinations within Oracle Lease Management.

Steps

Perform the following steps:

  1. Click Create in the Off Lease Amortization Hold Periods page. The Create Off Lease Amortization Hold Periods page opens.

  2. Select the 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.

  3. Select an Asset Category from the list of values.

  4. Select the Asset Book from the list of values.

  5. To override the Depreciation Method for the hold period, choose an alternative method from the list of values.

  6. Enter the number of Hold Period Days.

  7. Click Apply to add the Combination to Oracle Lease Management.

    The combination is now set up in Oracle Lease Management, allowing you to define a hold period or depreciation method within Oracle Lease Management.

Set Up Subsidies

Before subsides can be used in contract authoring or lease quoting, they must be created and defined. The following procedures show how to set up a subsidy.

For more information on subsidies, see Subsidies, Oracle Lease Management User's Guide.

Create Subsidy

Steps

Perform the following steps:

  1. In the Subsidies page, click Create.

  2. Enter subsidy data in the Create Subsidy page.

  3. When the terms of the subsidy are defined, click Apply.

The following table describes selected fields on the Subsidies pages.

Create Subsidy Field References
Field Description
Operating Unit Operating Unit assigned to the record.

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.
Exclusive Determines whether subsidy can be used with other subsidies.
Available on Release Determines whether subsidy is available when equipment comes off lease and is subsequently re-leased.
Basis Determines the basis on which the subsidy will be calculated. After selecting the basis, enter the required parameters to calculate the subsidy.
Stream Type Determines accounting for payment streams.
Accounting Method Select Amortize to amortize a subsidy over the life of a lease. Select Net to recognize subsidies in one period.
Net on Funding Select Bill to generate a Receivables invoice. Select Fund to deduct subsidy from the funding disbursement.
Visible to Customers Determines whether subsidy will be visible to customers or not.
Recourse Determines whether subsidy is subject to recourse and must be refunded to the vendor if the lease is terminated early.
Refund Basis If a subsidy is subject to recourse, select the refund basis and define the formula to calculate the refund amount.
Maximum Financed Amount Limits the basis amount that is applied to a subsidy.
Maximum Subsidy Amount Limits the amount of subsidy to be applied to the contract.

Define Subsidy Criteria

Prerequisites

Must have created a subsidy.

Must have set up Oracle Inventory, Receivables, Financial Products, TCA, and Standard Industry Code (SIC) to generate a list of values in the Criteria Categories pages.

Steps

Perform the following steps:

  1. In the Subsidies page, search the subsidy for which you want to create criteria.

  2. Click the Criteria icon for the applicable subsidy in the search results. The Subsidy Criteria page for the subsidy opens.

  3. Click Create. The Create Subsidy Criterion page opens.

  4. Provide the details and click Apply.

The following table describes selected fields in the Create Subsidy Criterion page.

Field References for Subsidy Criteria
Field Description
Industry Organization Oracle Inventory Organization name.
Item Oracle Inventory master item.
Customer Credit Class The credit class of customer found in TCA. LOV: query is from okl_cus_credit_classes_uv (AR_LOOKUPS CCC WHERE ccc.lookup_type=AR_CMGT_TRADE_RATINGS) (Oracle Receivables)
Sales Territory Territory of sales. LOV: query from okl_ra_territories_uv (RA_TERRITORIES) (Oracle Receivables)
Product Financial product name.
Industry Code Type The Standard Industry Code (SIC) type. LOV: query is from okl_industry_code_types_uv (AR_LOOKUPS and idty.lookup_type=3. SIC_CODE_TYPE (Oracle Receivables)
Industry Code The Standard Industry Code (SIC) reference. LOV: query is from okl_industry_codes_uv (AR_LOOKUPS) (Oracle Receivables)

Set Up Sales Tax

Set Up Sales Tax in Oracle Lease Management

To set up sales tax in Lease Management, you must complete the following tasks:

For information on sales tax, see Sales Tax., Oracle Lease Management User's Guide

Enable Tax Calls

To enable tax calls, navigate to Setup > System Options > Transaction Tax Options

You can enable the generation of upfront tax calls and tax schedule calls for an operating unit by checking the respective checkboxes. If the upfront tax is enabled, you must select a billable stream type, for billing upfront tax on upgraded contracts, that does not have a billable stream type defined in the tax terms and conditions.

Set Up Tax Transaction Business Categories

To associate Tax Transaction Business Categories with the lease contract details, navigate to Setup > Transaction Tax > Tax Transaction Business Categories.

First, you need to define details in the Tax Transaction Business Category Association page, click Create to associate a Transaction Business Category code to your specific lease details. Click Apply when done.

The list of values for the Tax Transaction Business Category field on the Tax Transaction Business Category Association Search page displays all codes that have previously been associated to your specific lease details. The list of values for the Tax Transaction Business Category field on the Create Tax Transaction Business Category Association page displays all active codes that have not previously been associated to your specific lease details.

Lease details for Transaction Business Category codes can be updated. Transaction Business Category codes are available across operating units.

The following table shows valid values for Transaction Business Category fields:

Transaction Business Category Fields
Lease Fields Valid Values TBC Defaulting Logic
Transaction Type All sales tax enabled transaction types
Null		 Search for TBC with transaction-specific transaction type value. If not found, use TBC with transaction type of Null
Stream Type All stream types
Null		 Search for TBC with transaction-specific stream type value. If not found, use TBC with stream type of Null
Purchase Option $1 Buyout
Fair Market Value
Fixed Amount
None
Null		 Search for TBC with transaction-specific purchase option value. If not found, use TBC with purchase option of Null.
Usage of Equipment All user-defined values
Null		 Search for TBC with transaction-specific usage of equipment value. If not found, use TBC with usage of equipment value of Null.
Vendor Location All user-defined values
Null		 Search for TBC with transaction-specific Vendor Location value. If not found, use TBC with Vendor Location of Null.
Age of Equipment From Any positive number
Null		 Search for TBC where the age of an asset on the transaction falls between the Age of Equipment From and the Age of Equipment To, or Null.
Age of Equipment To Any positive number
Null		 Search for TBC where the age of an asset on the transaction falls between the Age of Equipment From and the Age of Equipment To, or Null.
Financial Product All products defined by user
Null		 Search for TBC with transaction-specific Financial Product value. If not found, use TBC with Financial Product = Null
Interest Disclosed Yes
No		 Search for TBC with transaction-specific Interest Disclosed value. If not found, use TBC with Interest Disclosed of No.
Transfer of Title Yes
No		 Search for TBC with transaction-specific Transfer of Title value. If not found, use TBC with Transfer of Title of No.
Sale/Lease Back Yes
No		 Search for TBC with transaction-specific Sale/Lease Back value. If not found, use TBC with Sale/Lease back of No.
Purchase of Lease Yes
No		 Search for TBC with transaction-specific Purchase of Lease value. If not found, use TBC with Purchase of Lease of No.

Set Up Tax Product Categories

To set up tax product categories, navigate to Setup > Transaction Tax > Tax Product Categories. In the Tax Product Category Association page, click Create to associate product categories to your specific lease details. Click Apply when done.

Set Up Tax User-Defined Fiscal Classifications

To set up tax user-defined fiscal classifications, navigate to Setup > Transaction Tax > Tax User Defined Fiscal Classifications. In the Tax User Defined Fiscal Classification Association page, click Create to define fiscal classifications for your specific lease business scenario. Click Apply when done.

Set Up Business Tax Override

To set up a business tax override, navigate to Setup > Transaction Tax > Tax Basis Override. Enter the Operating Unit and Transaction Type combination and click Go.

In the Tax Basis Override page, associate a formula with each transaction type. If a formula is defined for the transaction type of a transaction, Lease Management evaluates the formula and replaces the default taxable basis amount with the amount returned by the formula. In this case, the tax is calculated by applying the tax rate to the amount determined by the formula.

All parameters available for tax call are available to the formula for determining the tax basis amount. Tax basis override is applicable to upfront tax and invoice tax calculation only.

Set Up Property Tax

Property tax set up in Lease Management consists of the following tasks:

  1. Set Up Property Tax Options

  2. Set Up Property Tax Stream Types and Accounting Templates

  3. Set Up Tax Authorities in Oracle Payables

  4. Set Up Property Tax Import

For more information on property tax, see Property Tax, Oracle Lease Management User's Guide.

Set Up Property Tax Options

You can set up property tax details at the operating unit level, and override these details when authoring a contract. Property tax details are entered in the Property Tax Options page, under the Setup tab and System Options subtab. All property tax details set up default onto your contracts. The following table explains property tax options:

Field Description
Property Tax Applicable When set to Yes, determines the property tax functionality is applicable for an asset.
Bill Property Tax Property tax can be billed to lessee by selecting Estimated, Actual, or Estimated and Actual.

  1. Estimated - lessee billed for estimated property tax only

  2. Actual - lessee billed for actual property tax only. Actual property tax is imported from external applications only.

  3. Estimated and Actual - lessee is billed for the estimated property tax and the adjustment resulting from the property tax reconciliation. If you bill estimated property tax, you can bill the difference between actual and estimated tax as an adjustment. If the actual property tax is greater than estimated tax billed, you can create an invoice for the difference. If the actual property tax is less than estimated tax billed, you can create a credit memo.

  4. None - lessee is not billed any property tax. This is the default value.
Define Property Tax on Sales Quote Set to Yes, applies property tax details and payment options on sales quotes. The default value is Yes.
Create Property Tax Payable Invoice Set to Yes, enables the creation of payable invoices to the tax authorities after tax details have been imported into Lease Management. The default value is No.

Set Up Property Tax Stream Types and Accounting Templates

You can define stream types with the purposes of Estimated Property Tax and Actual Property tax. Stream types will not be considered in the yield calculation. For information on setting up stream types, see

Set up accounting templates to account for both the billing and payment of tax. For information on setting up accounting templates, see Define Lease Accounting Templates.

Set Up Tax Authorities in Oracle Payables

If you want to pay tax authorities for the actual property tax amount, set them up as tax vendors in Oracle Payables. To set up tax vendors, see the Oracle Payables User Guide.

Set Up Property Tax Import

To import third party application property tax files, you must complete the following tasks:

  1. In the Property Tax Options page, Property Tax Applicable must be set to Yes.

  2. The tax authority must be defined as a tax vendor in Oracle Payables.

Define Insurance

About Oracle Lease Management Insurance Products

The main goal of insurance functionality within Oracle Lease Management is to ensure that assets within contract agreements have adequate insurance coverage. This can be provided in one of the following ways:

Lessors can also sell optional insurance products that reduce lessee business risk, such as life, property and casualty insurance.

These implementation tasks affect the setup of Oracle Lease Management insurance products. Also see Define Insurance Providers.

Set up Insurance Item Type Profile Option

Required

To work with insurance products in Oracle Lease Management, you must set up the profile option OKL: Insurance Item Type in System Administration to point to your insurance item type.

You can set up the profile option OKL: Insurance Item Type at the Site or Responsibility level.

For more information, see Setting Profile Options, Oracle Applications System Administrator's Guide - Maintenance.

Prerequisites

Define the insurance item type in Oracle Inventory.

Define Insurance Class Lookups

Required

To define your insurance asset classes, you must first define an Insurance Class Lookup of OKL_INSURANCE_ASSET_CLASS.

One or more asset categories are assigned to insurance classes. These groupings of asset categories to insurance classes create logical classes for determining insurance premium rates for products. For more information, see Define Insurance Asset Classes".

To create or modify any lookup types and lookup names which relate to Oracle Lease Management, you must have the Application Developer responsibility within Oracle Applications. Use the Application Object Library Lookups window (Application > Lookups > Application Object Library).

For more information, see the Oracle Applications User's Guide.

Prerequisites

None

Define Insurance Factor Lookups

Required

To define your insurance products, you must first define an Insurance Factor Lookup of OKL_INSURANCE_FACTOR.

For lease insurance products, set up the insurance factor lookup Equipment Cost.

An optional insurance product could be a life insurance policy, with an insurance factor of age. For this situation, you must set up an insurance factor lookup of Age.

To create or modify any lookup types and lookup names which relate to Oracle Lease Management, you must have the Application Developer responsibility within Oracle Applications. Use the Application Object Library Lookups window (Application > Lookups > Application Object Library).

For more information, see the Oracle Applications User's Guide.

Prerequisites

None

Define Insurer Ranking

Required

If a lessee does not provide third party insurance information within a certain time frame after contract activation, the lessor can add insurance to the contract.

To decide which insurance provider is selected, if more than one provider offers coverage for the same range of asset costs, you must rank your insurance providers. This ranking is then used in the determination of the insurance placement.

Prerequisites

Define the insurance provider as an insurance supplier in Oracle Payables.

Steps

Perform the following steps:

  1. Click Create in the Insurer Rankings page. The Create Insurer Rankings page opens.

  2. Select the Country.

  3. Select the insurance Provider.

  4. Select the Ranking number.

  5. Enter the Effective From date, and optionally the Effective To date, if known.

  6. Click Apply.

Define Insurance Products

Required

All insurance products provided by the lessor must be defined in Oracle Lease Management.

Each insurance product must reference an item code in Oracle Inventory.

You must choose whether the product is an lease insurance product or an optional insurance product.

For optional insurance products, you must select the insurance factor, such as age, upon which the insurance product coverage is based. For lease insurance products, the insurance factor is always the original equipment cost.

The insurance factor must have a minimum and a maximum value associated with it, such as minimum and maximum age allowed by the product, or lowest and highest asset cost.

You must also specify

Prerequisites

Define Items

Define Insurance Providers

Set up Insurance Item Type Profile Option

Steps

Perform the following steps:

  1. Click Create in the Insurance Products page. The Create Insurance product page opens.

  2. Select the 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.

  3. Enter the name of a product that references an item code in Oracle Inventory.

  4. Select a Provider, as registered in Oracle Payables.

  5. Enter the Policy Symbol. This serves as the prefix for all policy numbers derived from this product.

  6. Select the Insurance Type (Lease Product or Optional Product).

  7. Select the Factor Name if the insurance type is Optional Product.

    If the insurance type is Lease Product, select Equipment Cost for the Factor Name.

  8. Enter the minimum and maximum values to be allowed for the insurance factor for all rate ranges.

  9. Enter the minimum and maximum values for the Coverage of Optional Products.

  10. Enter the minimum and maximum values for the Deal Length in months.

  11. Enter the Effective From date, and optionally the Effective To date, if known.

  12. Click Apply.

Define Insurance Asset Classes

Required

Each asset category to be covered by lease insurance must match an insurance class set up in Oracle Lease Management. An insurance class can be used for multiple asset categories. The mapping of an asset category to an insurance class creates an insurance asset class, which is a required parameter for the creation of an insurance rate.

Prerequisites

Define Insurance Factor Lookups

Steps

Perform the following steps:

  1. Click Create in the Insurance Asset Classes page. The Create Insurance Asset Classes page opens.

  2. Select the Insurance Class.

  3. Select the Asset Category.

  4. Enter the Effective From date and optionally the Effective To date, if known.

  5. Click Apply.

Define Insurance Rates

Required

For calculating premiums, the insurance factor which has been assigned to a product can be broken down into ranges, which must not overlap.

You associate a separate insurance rate for each factor range. For example, for a life insurance product with a factor of applicant's age, the range of 18-35 can carry one rate and 36-65 can carry a different rate. Each rate for the specified range applies to only one country.

For each insurance rate, you must specify the rate paid to the insurer (also known as the provider), and the rate to be charged to the policy holder (the lessee).

The rate multiplied against the OEC factor for lease products or the coverage amount for optional products determines the premium.

For lease insurance products only, you must also specify the insurance asset class for the insurance rate.

Prerequisites

Define Insurance Products

Define Insurance Asset Classes

Steps

Perform the following steps:

  1. In the Insurance Products page, search the insurance product for which you want to specify the insurance rates.

  2. Click the Rates icon for the applicable insurance product in the results area. The Insurance Product Rates page opens.

  3. Click Create. The Create Insurance Rate page opens.

  4. Select the Country.

  5. Select the Product Name.

    As you select the product name, the factor for the product is displayed.

  6. For a lease insurance product, select the Insurance Asset Class.

    This is the insurance asset class to be associated with this insurance rate.

  7. Enter a minimum and maximum values for the factor range for this insurance rate.

  8. Enter the Insurer rate as a percentage, that is, the rate paid to the provider.

  9. Enter the Lessee rate as a percentage, that is, the rate charged to the policy holder (the lessee).

  10. Enter the Effective From date, and optionally the Effective To date, if known.

  11. Click Apply.

  12. If your insurance product has different rates for different factor ranges, repeat steps 4 through 10 for each new rate for the insurance product within each country.

Define Insurance Restrictions

Optional

You can identify industries and asset categories within a country that are not insurable, by creating insurance exclusions (also known as insurance restrictions).

Prerequisites

None

Steps

Perform the following steps:

  1. Click Create in the Insurance Restrictions page. The Create Insurance Restriction page opens.

  2. Select the Country.

  3. Select the Asset Category, as registered in Oracle Assets.

  4. Enter the Industry Type.

    Industry Type means the appropriate SIC (Standard Industry Code).

    The industries that you want to exclude must match the type value entered on the customer record. This entry differs depending on the country. In the USA, Industry Type means the appropriate SIC (Standard Industry Code).

  5. Optionally enter some Comments.

  6. Enter the Effective From date and the Effective To date, if known.

  7. Click Apply.

Define Insurance Tasks

Use the Task Setup for Automatic Insurance page to auto-create a CRM Task upon failure of automatic insurance program.

Steps

Perform the following:

  1. Click Update in the Task Setup for Automatic Insurance page. The Update Task Setup for Automatic Insurance opens.

  2. Select applicable values to auto-create a CRM Task.

  3. Click Apply.

Define Parameters for Automatic Placement of Insurance Business Rules

Required

If a lessee does not provide third party insurance information within a certain time frame after contract activation, the lessor can add insurance to the contract.

The auto-placement of insurance program is subject to various conditions, several of which are set up as seeded system profile values, which you can alter to suit your particular business requirements.

The system profile conditions which you can change each contain a parameter, or are subject to a flag which enables or disables a feature.

The following table shows the full list of automatic insurance placement conditions and the seeded parameter values released with Oracle Lease Management.

Insurance Placement Conditions and Seeded Values
Condition Seeded Parameter Value
Notify customer X days prior to insurance expiration X = 60
Inform customer of expiration? Yes
If proof of insurance not provided X days after contract activation, trigger automatic placement X = 30
If deal size is greater than X, do not quote insurance X = US $1,000,000
If term is less than X months, do not quote insurance X = 6
If term is greater than X months, do not quote insurance X = 120
Activate insurance policy after X days X = 90
Activate insurance after X% of premium is paid X = 50%
Premium paid at X% of total X = 80%
Cancellation upon receipt of third party details? Yes
Maximum number of months to refund X = 6
Number of months after first premium paid to receive a refund X = 6

For more information about system profiles, and how to change them, see the Oracle Application System Administrator's Guide - Maintenance.

Prerequisites

None

Set Up Pricing Engine Integration for Stream Generation

This section outlines the process for setting up the integration of the pricing engine through the XML Gateway between Oracle Lease Management and a third-party lease price modeling software program. This setup enables pricing, stream generation, and yield calculation with your third-party lease price modeling software.

Synchronize the pricing setups for the external pricing engine software with your current Oracle Lease Management operations. For example, do not allow the external pricing software setup to return streams for state tax depreciation if you are not updating state tax depreciation on lease contracts.

To enable this functionality, you must set up the XML Gateway in such a way that the configuration includes both inbound and outbound operations. Stream generation is a two-way process, whereby lease and/or loan contract details are sent out of Oracle Lease Management into a pricing engine, which then returns relevant information, including stream schedules and yield calculations.

Note: Prior to setting up the XML Gateway, you must have the Oracle XML Gateway software, the Oracle Transport Agent (OTA) and Oracle Advanced Queues properly installed.

You must perform these tasks to properly set up the XML Gateway:

Define the Pricing Engine as a Customer in Oracle Receivables

Required

You must define the third-party lease price modeling software that you are using for stream generation as a standard customer in Oracle Receivables. At a minimum, you must enter the name and address of the fields.

Important: The Name you use when setting up the third-party lease price modeling software as a customer in Oracle Receivables is the exact name that you enter when you configure the OKL: Stream Generation Pricing Engine Name profile option.

Use the Customers page in Oracle Receivables to define customers. (Responsibility: Receivables Manager; Customers > Standard)

For more details on defining customers, see the Oracle Receivables User Guide.

Prerequisites

None

Define Profile Options

You must define some specific profile options at the site level with specific values to enable the XML Gateway and Oracle Lease Management stream generation. The following table describes stream generation profile options.

Profile Options and Associated Values for Stream Generation
Profile Option Required Value
ECX: Log File Path The value of the environment variable APPLPTMP
(Example: For UNIX, find the value using this command: $echo$APPLPTMP)
OKL: Stream Generation Log Directory The value of the environment variable APPLPTMP
OKL: Stream Generation Pricing Engine Name <third-party lease price modeling software name>
This must be the same as the customer name defined in Oracle Receivables.
OKL: Stream Generation Pricing Engine URL <URL of the pricing engine where it accepts inbound XML messages.>
Note: This URL must contain the port number.
OKL: Stream Generation Time Out The time in minutes after which a pending request for Streams Generation is marked as TIMED_OUT.

For more information, see Setting Profile Options, Oracle Applications System Administrator's Guide - Maintenance.

Prerequisites

Define the third-party lease price modeling software as a customer in Oracle Receivables.

Define Trading Partner and Transaction Types

Required

To enable inbound and outbound messages through the XML Gateway, you must define the third-party lease price modeling software as a Trading Partner in the XML Gateway, and then configure all the possible transactions that occur between the trading partner and Oracle Lease Management.

The four seeded transaction types are: Outbound/In Bound Lease and Outbound/In Bound Loan.

These topics cover how to create a trading partner and set up inbound and outbound transaction types:

Create a Trading Partner

Set up Outbound Transaction Types

Set up Inbound Transaction Types

Create a Trading Partner

The following steps describe how to create a trading partner. Following these procedures are steps on setting up outbound and inbound transaction types.

Prerequisites

Define the third-party lease price modeling software as a customer in Oracle Receivables.

Steps

Perform the following steps using the Trading Partner Setup window:

  1. In the Trading Partner Type field, select Customer from the list of values.

  2. In the Trading Partner Name field, select the name from the list of values.

    This must be the name that you set up in Oracle Receivables for your third-party lease price modeling software.

  3. Choose the Trading Partner Site from the list of values.

  4. In the Company Admin Email field, enter the e-mail address for the company contact in case of error notification.

  5. Save your work.

When SSL is enabled in Oracle Applications, the following set up steps are required to enable external stream generation:

  1. Complete the set up for the XML Gateway Trading Partner.

  2. Responsibility: XML Gateway

  3. Form: Define Trading Partners

  4. For the Trading Partner: SuperTrump, update the Protocol Type from HTTP to HTTPS, and update the Protocol Address from http:// to https://.

  5. Download and install the public server certificate in your browser.

  6. Bounce the middle tier.

Set Up Outbound Transaction Types

In the Trading Partner Details section, you must enter the details of the transactions to enable. The following steps outline the process of setting up a Lease Booking Outbound Transaction, one of the two outbound transactions used in Oracle Lease Management.

Prerequisites

Define the third-party lease price modeling software as a customer in Oracle Receivables.

You have created a trading partner and have placed the trading partner in context. For more information, see Create a Trading Partner.

Steps

Perform the following steps using the Trading Partner Setup window:

  1. In the Transaction Type field, choose the transaction type OKL_ST, with a Transaction Sub type of LSBO and a direction of OUT.

    These transaction types are seeded. Selecting the one with the above values populates some other related fields.

  2. In the Map field, choose OKL_STLEASEBOOKING_W3C10_OUT.

  3. In the Connection/Hub field, choose DIRECT.

  4. In the Protocol Type field, choose HTTP.

  5. In the User name field, enter your database user name.

  6. In the Password field, enter your database password.

    Note: The password needs to be a minimum of five characters. If your password is less than five characters, then append it with colons (:) to make it five characters. If the setup for does not accept colons then you can use a lowercase z in its place. This is the database user name and password combination for the applications schema that has execute privileges on the plsql procedures.

  7. In the protocol address field enter:

    <Your application's URL>oklLpSTProxySrvr.jsp.

    Example:

    http://xyz.us.oracle.com:5800/OA_HTML/oklLpSTProxySrvr.jsp.

    Specify the port number for the apache application server in the protocol address.

    Note: Even if the apache application is running on port 80, specify the port number explicitly as 80.

  8. In the Source Trading Partner Location code field, enter the name of your third-party lease price modeling software vendor.

  9. Repeat steps 1-8 for the Loan Booking Outbound transaction type, using these values:

    • Transaction Type: OKL_ST

    • Transaction Sub Type: LNBO

    • Direction: OUT

    • Map: OKL_STLOANBOOKING_W3C10_OUT

    • Connection/Hug: DIRECT

    • Protocol Type: HTTP

    • Username: <your database user name>

    • Password: <your database password>

    • Protocol Address: <Your application's apache URL>oklLpSTProxySrvr.jsp

      For example: http://xyz.us.oracle.com:5800/OA_HTML/oklLpSTProxySrvr.jsp.

    • Source Trading Partner Location: <third-party lease price modeling software name>

  10. For the Lease Restructure and Lease Renewals transaction types, repeat Step 9 with these changes:

    • Transaction Sub Type: LSRO

    • Map: OKL_STLEASERESTRUCT_W3C10_OUT

      (All other values remain the same as those used in Step 9.)

  11. For the Lease Quotes transaction type, repeat Step 9 with these changes:

    • Transaction Sub Type: LSQO

    • Map: OKL_STLEASEQUOTE_W3C10_OUT

      (All other values remain the same as those used in Step 9.)

  12. For the Variable Interest Rate Loans and Loan Quotes transaction types, repeat Step 9 with these changes:

    • Transaction Sub Type: LNQO

    • Map: OKL_STLOANQUOTE_W3C10_OUT

      (All other values remain the same as those used in Step 9.)

  13. For the Loan Restructure and Loan Renewals transaction types, repeat Step 9 with these changes:

    • Transaction Sub Type: LNRO

    • Map: OKL_STLOANRESTRUCT_W3C10_OUT

  14. Save the records.

Set Up Inbound Transaction Types

The following steps outline the process of setting up a Lease Booking In Bound Transaction, one of the two in bound transactions that Oracle Lease Management uses.

Prerequisites

Define the third-party lease price modeling software as a customer in Oracle Receivables.

You have created a trading partner and have placed the trading partner in context. For more information, see Create a Trading Partner.

Steps

Perform the following steps using the Trading Partner Setup window:

  1. In the Transaction Type field, choose the transaction type OKL_ST, with a Transaction Sub type of LSBI and a direction of IN.

    These transaction types are seeded. Selecting the one with the above values populates some other related fields.

  2. In the Map field, choose OKL_STLEASEBOOKING_W3C10_IN.

  3. In the Source Trading Partner Location code field, enter the name of your third-party lease price modeling software vendor.

  4. Repeat steps 1-3 for the Loan Booking In Bound transaction type, using these values:

    • Transaction Type: OKL_ST

    • Transaction Sub Type: LNBI

    • Direction: IN

    • Map: OKL_STLOANBOOKING_W3C10_IN

    • Source Trading Partner Location: <third-party lease price modeling software name>

  5. Repeat step 4 for Lease Restructure and Lease Renewals In Bound transaction types, with these value changes:

    • Transaction Sub Type: LSRI

    • Map: OKL_STLOANRESTRUCT_W3C10_IN

      (All other values remain the same as those used in Step 4.)

  6. Repeat step 4 for Lease Quotes In Bound transaction type, with these value changes:

    • Transaction Sub Type: LSQI

    • Map: OKL_STLEASERESTRUCT_W3C10_IN

      (All other values remain the same as those used in Step 4.)

  7. Repeat step 4 for Loan Quotes and Variable Interest Rate Loans In Bound transaction types, with these value changes:

    • Transaction Sub Type: LNQI

    • Map: OKL_STLOANRESTRUCT_W3C10_IN

      (All other values remain the same as those used in Step 4.)

  8. Repeat step 4 for Loan Restructure and Loan Renewals Inbound transaction types, with these value changes:

    • Transaction Sub Type: LNRI

    • Map: OKL_STLOANRESTRUCT_W3C10_IN

  9. Save your work.

    Note: The Source Trading Partner Location, the Customer name in Oracle Receivables, and the OKL: Stream Generation Pricing Engine Name profile option all MUST contain the exact same name.

Schedule Pricing Time Out Concurrent Program

In the course of generating streams, requests are periodically sent back and forth through the XML Gateway. In the event that a request does not get returned in the system, you must enable a facility to clear out these requests. In Oracle Lease Management, you run the OKL Pricing Time Out concurrent program.

This concurrent program should be scheduled to run periodically, depending upon the needs of your system. You can reschedule this concurrent program --such as run more often, less often, and so on--as your needs change.

For more information on setting up and running concurrent programs, see the Oracle Applications System Administrator's Guides.

Prerequisites

None

Define Workflow

Oracle Workflow automates and improves business processes. With Workflow, you can route information of any type to both people inside and outside your enterprise. The routing of information follows business rules that you can modify.

With Oracle Workflow, you can:

For example, you can use Workflow to start a contract approval process that requires multiple levels of approval by both internal and external approval parties.

There is a specific modification that you must make to an Oracle Order Management workflow to sell inventory items through Oracle iStore. This modification adds Oracle Lease Management processes to the Order Management workflow and is required for the standard remarketing process. For more information, see Modify Order Management Workflow to Enable Standard Remarketing.

For more information on setting up workflows, see the Oracle Workflow Guide.

Seeded Business Events For Lease Contract Authoring

Lease Management includes seeded business events that can automate lease authoring business processes. Authoring events include clicking on Create, Update, or other action-type buttons and hyperlinks. Enabled events are triggered after the record is written to the database, when a confirmation message such as “Successfully created / updated / deleted” is displayed. See Seeded Business Events For Lease Contract Authoring for a list of the seeded Lease Management business events.

Use these Lease Management business events to connect to Oracle Workflow business events to create tasks, record notes, send notifications, and route contracts to colleagues.

To implement the seeded business events in Lease Management:

  1. Enable seeded business events. You may also modify or subsequently disable business events.

  2. Associate lease authoring business events to Oracle Workflow business events, including registering appropriate deferred (asynchronous) subscriptions. See Oracle Workflow documentation.

Additionally, use these business events to facilitate extensibility to existing APIs.

Synchronous Subscription Workflows Require Customization

You may use the Lease Management business events to create custom workflows. Customized workflows using Lease Management business events may include synchronous subscriptions. Synchronous subscriptions, however, not usually recommended, require customized workflows.

Modify Order Management Workflow to Enable Standard Remarketing

Required

To sell remarketed inventory items through Oracle iStore, you must complete several setup steps, including modifying the Order Management workflow OM Order Header. Use the Oracle Workflow Builder and Database Administrator responsibility with appropriate database access to modify the existing workflows. These modifications enable Oracle Lease Management's system to:

Prerequisites

Oracle Workflow Builder must be installed.

Oracle Lease Management's Customized Order Management Order Header Workflow must exist.

Steps

Perform the following steps:

  1. Within the Workflow Builder, find and open the item type OM Order Header from within the database.

    This item type is Order Management's default order header workflow

  2. Find and open the item type OKL - AM : OM Order Header from within the database.

    This item type is Oracle Lease Management's modified Order Management workflow.

  3. From the workflow builder navigator tree, expand the Functions branch and drag and drop the following function nodes from OKL -AM : OM Order Header item type into the OM Order Header item type:

    • Create Remarket Invoice

    • Dispose Asset

    • Reduce Item Quantity

    • Update Asset Return Status

  4. Expand the Processes branch and drag and drop the OKL Order Flow - Generic process diagram from the OKL - AM : OM Order Header item type into the OM Order Header item type.

  5. Validate OM Order Header item type and save it in the database.

    In the error message dialogue box, search for any errors that directly relate to the modification you just made. Ignore all others.

    If there are no related errors, you have successfully added Oracle Lease Management's modified Order Management process flow to the item type OM Order Header.

Guidelines

During the Oracle Order Management implementation, you must set up Oracle Lease Management transaction types for Order Header and Order Line. You must also set up document sequencing for this transaction type.

Set Up Credit Checklists

Prerequisites

You must have set up and defined item codes for the potential actions to be entered on checklists. Use the Application Object Library Lookups window (Application > Lookups > Application Object Library) For more information, see the Oracle Applications User's Guide.

Steps

Perform the following steps:

  1. If you want to use credit checklists, click Create in the Checklists page. The Create Checklist page opens.

  2. Enter the name of the checklist.

  3. In the Type field, select Credit Line checklist template (or Funding Request checklist template) from the list of values.

  4. You may enter a short or longer description (or both) for the checklist.

  5. Enter the Effective Date range of the checklist template.

  6. Navigate to Setup > Checklist > Checklist Contents.

  7. The Checklist Contents Page appears, allowing you to enter the checklist items.

  8. If you want to delete one or more items from the checklist, select the Remove check box next to each item, and click Update.

  9. For the items that you want to be on the checklist, in the Item Code field, click the flashlight icon and select the item code from the list of item codes.

  10. The remaining fields for the item are displayed: Item, Description, and Effective From date.

  11. Repeat step 9 for each separate item that you want to include on the checklist.

  12. Click Apply.

Customizing Users' Lease Management Home Pages

See the Oracle Self-Service Web Applications Implementation manual.

Set Up Vendor Residual Sharing

Overview

To set up vendor residual sharing, complete the following tasks.

Set Up Vendors in Oracle Purchasing

To set up vendors in Oracle Purchasing, see the Oracle Purchasing User's Guide.

Set Up Vendor Residual Sharing Formula

To enable different vendor residual sharing calculations under different program agreements, Lease Management enables you to create formulas to be used in calculating residual sharing. To create your own formula, see Define Formulas.

If you choose not to create a custom formula, you can use the seeded Lease Management formula, Vendor Residual Share, which has the following calculation:

Vendor Residual Share = (Proceeds minus Cost Basis) * Residual Sharing %

In this formula, Proceeds are the sales proceeds in Fixed Assets: the amount received from the sale to the lessee, the amount received from remarketing to a third party, or the amount received from scrapping the asset. The Cost Basis is the residual value stated in future value terms.

Add Vendor Residual Sharing Stream

Before vendor residual sharing can be processed, you must complete the following set up tasks in Lease Management.

Set Up Reconciliation Report Templates

To set up the Reconciliation Report Template for balances and activity, perform the following:

  1. Navigate to the Reports Summary page.

  2. Click Create and enter the details as described in the following table.

Report Parameters
Name Template Name
Type Template Type: Balances or Activity
Description A short description for the template.
Chart of Accounts Chart of Accounts for which you want to perform the reconciliation process.
Ledger Select the ledger if you are defining the template. The ledger defined here is defaulted on the request parameter, which you can change while submitting the request.
Natural Accounts
Segment From, Segment To		 Select the natural account range for which balance or activity needs to be reconciled. The reconciliation report sums up the closing balance or activity of all the accounts as on a given period within the natural account range.
Book Classifications Select one or more book classifications for reconciliation. The stream element balance as on a given date and transactions of all the contracts related to the selected book classification in a given period range, is used for reconciliation.
Financial Products Select one or more for reconciliation. The stream element balance as on a given date and transactions of all the contracts related to the selected book classification in a period range, is used for reconciliation.

Note: If you need to reconcile the contracts related to specific financial products then do not select the book classification, select only the financial products. Use book classification only when you want to reconcile all the contracts related to that book classification, irrespective of the financial product.
Streams  
Balance Type Unbilled: To generate reconciliation report for unbilled receivables.
Unaccrued: To generate reconciliation report for unearned income.
Blank: To generate reconciliation report for residual value.
Accrual:If template type is Activity, then the balance type is defaulted to Accrual.
Stream Type For Unbilled Receivable Reconciliation:
Select a stream type, sum of which is accounted as an unbilled receivable while booking the contract in the account, selected in the natural accounts range. The billing of the selected stream should credit the unbilled receivable account.

Note: The reconciliation report reconciles the sum of yet to be billed streams selected in this field with the balance of natural accounts selected in the segment range.


For Unearned Income Reconciliation:
Select an accrual stream type, sum of which is accounted as an unearned receivable while booking the contract in the account, selected in the natural accounts range. The accrual of the selected stream should credit the unearned income account.

Note: The reconciliation report reconciles the sum of yet to be accrued streams selected in this field with the balance of natural accounts selected in the segment range.


For Residual Value Reconciliation:
Select a residual value stream type, which is accounted as a residual value while booking the contract in the account, selected in the natural accounts range. The selected stream should credit the residual value account.

Note: The reconciliation report reconciles the sum of selected streams in this field with the balance of natural accounts selected in the segment range.


For Accrual Reconciliation:
Select an activity stream type such as rent for which accruals can be run. Make sure to select only the accrual streams with balance type set to Accrual.

Note: Accrual reconciliation reconciles accrual streams with transactions created and posted in GL against them for a period.
Transactions  
Transaction
Type
Stream Type		 Select the transaction type and stream:

  1. which should be accounted in the natural account that you selected in the natural account range.

    • For Unbilled Receivable: select the combination, which should either change the sum of yet to be billed stream (for the stream type selected in Streams) for a contract or generated based on the sum of yet to be billed stream. For example, in case of Direct finance lease, while booking the transaction, the unbilled receivable stream can be generated based on the sum of all unbilled stream with the purpose rent. At the time of billing transaction for rent, the stream elements which are yet to be billed will get reduced for a contract.

    • For Unearned Income: select the combination, which should either change the sum of yet to be accrued stream (for the stream type selected in Streams) for a contract or generated based on the sum of yet to be accrued stream. For example, in case of direct finance lease, while booking the transaction, the unearned income stream can be generated based on the sum of all unaccrued streams with the purpose per tax income. At the time of accrual transaction for per tax income, the stream elements, which are yet to be accrued, will get reduced for a contract.

    • For Residual Value: select the combination, which should either add, remove, or change the amount of residual value streams. For example, for the direct finance lease, while booking the transaction, the stream with the purpose residual value will be added and while termination, the residual value stream will be historized. While booking, if the residual value is changed for an asset, then re-booking can also result in a change of the residual value for a contract.

    • For Accrual Value: All stream types that track accrual activity like rent income, interest income, or expenses are included in the selection. You should select the transaction type as accrual when balance type is accrual.
Add or Subtract For Unbilled Receivable:
Select Add for the transaction type and stream combination, which will generate the debit entry for the account in the selected account range and which will increase or generate the yet to be billed stream for a contract.
Select Subtract for transaction type and stream combination, which will generate the credit entry for the account in the selected account range and which will decrease or remove (histories) the yet to be billed stream for a contract.
For Unearned Revenue:
Select Add for the transaction type and stream combination, which will generate the debit entry for the account in the selected account range and which will increase or generate the yet to be accrued stream for a contract.
Select Subtract for the transaction type and stream combination, which will generate the credit entry for the account in the selected account range and which will decrease or remove (histories) the yet to be accrued stream for a contract.
For Residual Value:
Select Add for the transaction type and stream combination, which will generate the debit entry for the account in the selected account range and which will increase/generate the residual value stream for a contract.
Select Subtract for the transaction type and stream combination, which will generate the credit entry for the account in the selected account range and which will decrease or remove (histories) the residual value stream for a contract.
For Accrual Value:
Select Subtract for the transaction type and stream combination. The selected stream type should credit the relevant accrual account each time accruals are run, so select the Subtract option.

Balances Report Example

To derive the reconciliation report for Balances for Unbilled receivables, set up the reconciliation template as follows:

Name: Unbilled Receivables <xxx>

Type: Balances

Chart of Accounts: Lease Account Flex <xxx>

Ledger Name: Ledger <xxx>

Segment From: 1232 (Unbilled Receivables) Segment To: 1232(Unbilled Receivables)

Book Classification: Direct Finance

Balance Type: Unbilled

Stream Type: Unbilled Receivables Purpose: Accounting

Transaction Type: Booking Stream Type: Unbilled Receivables Add or Subtract: Add

Transaction Type: Billing Stream Type: Rent Add or Subtract: Subtract

Transaction Type: Termination Stream Type: Unbilled Receivables Add or Subtract: Subtract

Transaction Type: Rebook Stream Type: Unbilled Receivables Add or Subtract: Subtract

Once reconciliation report is set up as mentioned above, use it as parameters to generate reconciliation reports for unbilled receivables for a period or ranges of periods.

Activity Report Example

To derive the reconciliation report for Activity for Unbilled receivables, set up the reconciliation template as follows:

Name: Accruals Rent<xxx>

Type: Activity

Chart of Accounts: Lease Account Flex <xxx>

Ledger Name: Ledger <xxx>

Segment From: 4504 (Lease Rent Revenue) Segment To: 4504 (Lease Rent Revenue)

Book Classification: Operating Lease

Balance Type: Accrual

Stream Type: Rent Accrual Purpose: Rent Accrual

Transaction Type: Booking Stream Type: Unbilled Receivables Add or Subtract: Add

Once reconciliation report is set up as mentioned above, use it as parameters to generate reconciliation reports for unbilled receivables for a period or ranges of periods.