This chapter covers the following topics:
Termination quotes allow contracts, or assets on a contract, to terminate early or at the expiration of the contract. When a contract is terminated with the purchase of the asset, the asset becomes off-lease and is available to the asset-return-to-disposal processes for remarketing or disposal.
The section includes the following topics:
Reasons for Termination Quotes
Levels of Termination
Forms of Termination Quotes
Types of Termination Quotes
Methods of Termination Quote Acceptance
Supported Contract Stages for Termination Quotes
Supported Combinations of Quote Line Types
Supported Contract Statuses for Termination Quotes
Reasons for termination quotes include the following:
The lessee wants to terminate the contract early and requests a termination quote. Termination quotes identify the financial impact of the termination. Various business rules that you specified in the contract's terms and conditions are the basis of calculating the financial impact of a termination quote. The lessee would make a choice:
Accept the quote and terminate the contract.
Continue with the contract to normal expiration.
In certain situations, the lessee can require a termination quote at contract expiration. For example, prior to contract expiration if the lessee wants to purchase the asset, then you can generate a termination quote to determine the end-of-term purchase option. The lessee would have the option to accept or not accept the termination quote
The lessee wants to terminate some of the assets of a contract, without transferring the assets to another contract and terminating the contract.
Oracle Lease and Finance Management supports the following levels of termination:
Termination of a complete contract
Termination of an asset line on a contract, or all the units of an asset line on a contract
Termination of some, but not all, of the units of an asset line on a contract; if the asset has a serial number, you specify the serial numbers of the asset units that you want to terminate
The termination of an asset line, or of some of the units of an asset line, is called a partial termination, or asset-level termination. Asset-level termination rebooks the original contract, without the terminated assets, with updated yields and insurance, and new contract-level and asset-level streams.
Contract terms and conditions define asset termination, including whether partial termination is allowed. The quotation process identifies the financial impact of the contract termination.
Oracle Lease and Finance Management allows the following two forms of termination quotes:
Standard
Manual
Oracle Lease and Finance Management generates a standard termination quote based on the terms and conditions set up in a contract.
Oracle Lease and Finance Management generates a manual termination quote when you bypass the terms and conditions of a contract and select the quote elements as you create the quote.
Note: Even if the contract's Termination Quote Process terms and conditions include the condition that partial termination is not allowed, you can create a partial termination quote using a manual termination quote.
In both standard and manual termination quotes, you can quote to terminate either the whole contract, or complete asset lines, or some of the units of individual asset lines.
You can also terminate assets without an explicit quote, by first entering a list of assets to terminate into an interface table, and then running a concurrent program.
Note: All amounts specified in a termination quote are in the contract currency.
Oracle Lease and Finance Management supports the following types of termination quotes:
Termination - With Purchase: For any lessee or guarantor who wants to purchase the asset.
Termination - Without Purchase: For any lessee or guarantor who does not want to purchase the asset.
Termination - Rollover To New Contract With Purchase: For any lessee or guarantor who has an existing contract, and wants to purchase the asset and finance the termination quote amount.
Termination - Rollover To New Contract Without Purchase: For lessee or guarantor who has an existing contract, does not want to purchase the asset, but wants to finance the termination quote amount.
Termination - Recourse With Purchase: For a vendor who wants to terminate the contract and/or purchase the asset based on the terms and conditions of the Vendor Program Agreement.
Termination - Recourse Without Purchase: For a vendor who wants to terminate the contract based on the terms and conditions of the Vendor Program Agreement.
Termination - Automatic Release Without Purchase: For anyone who wants to release the assets from one contract to another.
Note: The standard termination quote search, available when you navigate the path Asset Management > Quotes > Termination Quotes, allows you to see the full list of termination quote types.
You can also search for just the manual termination quotes when you navigate the path Asset Management > Quotes > Manual Termination Quotes.
If you are creating a standard termination quote, the valid quote types are:
Termination - With Purchase
Termination - Without Purchase
Termination - Rollover To New Contract With Purchase
Termination - Rollover To New Contract Without Purchase
Termination - Recourse With Purchase
Termination - Recourse Without Purchase
Note: The following quote types use the terms and conditions in the lease or loan contract:
Termination - With Purchase
Termination - Without Purchase
Termination - Rollover To New Contract With Purchase
Termination - Rollover To New Contract Without Purchase
The following quote types use the terms and conditions in the associated vendor program:
Termination - Recourse With Purchase
Termination - Recourse Without Purchase.
If you are creating a manual termination quote, the valid quote types are:
Termination - Manual With Purchase: For any lessee or guarantor to whom we have issued the manual termination quote and who wants to purchase the asset.
Termination - Manual Without Purchase: For any lessee or guarantor to whom we have issued the manual termination quote and who does not want to purchase the asset.
Note: The following quote types do not use the terms and conditions in the lease or loan contract nor the terms and conditions in the vendor program:
Termination - Manual With Purchase
Termination - Manual Without Purchase
The system option, Process Off Lease Transactions on Termination, enables the required transactions in asset books for the underlying asset to be returned to the lessor take place at the same time the termination is processed, for a termination without purchase. You do not have to wait till the asset is returned or any other event. It is available at the organizational level as a check box under Setup: System Options: Operational Options: Termination Options: Processing Options.
The methods of quote acceptance are:
Upon Receipt: Termination quote acceptance on receipt of the quote amount is available through lockbox functionality. When the amount of the termination quote is received through lockbox, identified with the termination quote number in the lockbox file, and meets specific validation for acceptance of the termination quote, the termination quote is accepted.
Pre-Proceeds: The contract terminates upon acceptance notification. The selection of Pre-Proceeds overrides the default Upon Receipt termination quote acceptance method.
Booking or Rebooking: On booking and rebooking of a new contract, the termination quote will automatically be accepted. Examples of this are rollover and release contracts.
The current termination quote process supports quote generation at the following stages of the contract's life:
Before the end of term
At the end of term
During the Evergreen period
Note: The parameter End of Term Tolerance Days in the contract's Termination Quote Process terms and conditions controls what is considered an early termination as opposed to an end of term termination. End of Term Tolerance Days specifies the number of days prior to the contract end date during which a termination quote is for an end of term termination; any termination quote before this is an early termination quote.
At all of these stages, you can generate quotes to include or exclude the purchase of the asset.
The following table shows valid combinations of quote line types and contract situations for termination quotes.
| Line Type | Applicability Based on Terms and Conditions | Ability to Specify Formula on Contract | Updatable After Creation of Quote | Define Stream for Billing and Accounting |
|---|---|---|---|---|
| Purchase Option Amount | Yes | Yes | Yes | Yes |
| Contract Obligation | Yes | Yes | No | Yes |
| Unbilled Receivables | Yes | Yes | No | Yes |
| Principal Balance | Yes | Yes | No | Yes |
| Discount Rate | Yes | Yes | Yes | Yes |
| Termination Penalty | Yes | Yes | Yes | Yes |
| Security Deposit | Yes | Yes | No | No |
| Return Fee | Yes | Yes | Yes | Yes |
| Rollover Incentive | Yes | Yes | Yes | Yes |
| Quote Fee | Yes | Yes | Yes | Yes |
| Estimated Property Tax | Yes | Yes | Yes | Yes |
| Outstanding Balance | Yes | No | No | No |
| Service & Maintenance | Yes | No | No | No |
| Contractual Fees | Yes | No | No | Yes |
| Tax/VAT | Always applicable | Yes (at site level) | No | No |
| Estimated Billing Adjustment | Always applicable | No | No | No |
| Miscellaneous | Yes | Yes | Yes | Yes |
Certain processes--such as termination quote, restructure quote, request termination, and contract expiration batches--are based the contract status. The following table shows supported combinations of the termination quote process and contract statuses.
When an Asset Manager accepts a termination quote for a fixed rate contract, the Oracle Lease and Finance Management termination process will verify that billing and accrual have been processed for the contract until the quote Effective From date.
If billing has not been processed, Oracle Lease and Finance Management will automatically run a billing program to complete the termination. If accrual has not been processed, Oracle Lease and Finance Management will automatically run an accrual program for fixed rate contracts to complete the termination.
For delinquent loans, lenders need to be able to repossess assets on the contract. Oracle Lease and Finance Management enables the repossession of loan assets through the existing Termination Quote infrastructure. Oracle Lease and Finance Management allows users to terminate loan contacts and repossess assets on the contract. Repossessed assets are created in Oracle Fixed Assets using user-defined values.
The accounting process for repossessed assets is supported by Oracle Subledger Accounting. Termination quotes for repossession functionality is not enabled for the account derivation method of Accounting Template Set (ATS).
Asset Managers or Operation Managers can perform the following steps to repossess loan assets.
Create a termination quote for repossession
Process repossessed assets
Post-processing of repossessed assets (remarket, scrap, re-lease)
Before termination quotes for repossession can be processed, you must complete the setup tasks for repossession. To set up termination quotes for repossession, see Termination Quotes for Repossession Setup, Oracle Lease and Finance Management Implementation Guide.
When a loan is delinquent, you begin the repossession process by creating a repossession request in Oracle Lease and Finance Management. The following table outlines the repossession request process.
| Field | Description |
|---|---|
| Create Termination Quote for Repossession | Create a termination quote for repossession of the type Termination - Manual Without Purchase |
| Update Termination Quote for Repossession | Optionally, you can update the asset details and repossession quote amounts. |
| Submit Termination Quote for Repossession for Approval | The Approver reviews the repossession request and approves the termination quote for repossession. On approval of the repossession request, asset return requests are created in Scheduled status. |
| View and Update Asset Return Request | You can view and update the asset return request created for a repossession quote. |
| Accept Termination Quote for Repossession | Accept the termination quote for repossession to process the contract termination. The repossessed asset is created and accounted for in Oracle Fixed Assets. |
| Asset Repossession Report | At any point in the process, you can generate an Asset Repossession Report for loans by running the Generate Pending Asset Repossession Report for Loans concurrent program. Reports are run for an operating unit or for a contract in the operating unit. |
To create a termination quote for repossession, navigate to Customers > Contracts and query the loan contract for which you want to create a repossession quote.
Select Terminate and click Go.
Select Termination Quote for Repossession from the Create dropdown menu and click Go. This will create a manual termination quote of the type Termination - Manual Without Purchase.
You can select the Repossession Quote reason or you can define a new quote reason.
To update asset details and repossession quote amounts, navigate to Asset Management > Termination Quotes > Update Termination Quote.
Optionally, you can modify the Effective To date on a termination quote for repossession to NULL.
To submit a termination quote for repossession to the Approver, navigate to Asset Management > Termination Quotes and search for the repossession quote to be submitted.
Click Submit.
The following conditions apply to this process:
Upon Approval, asset return requests are created for all assets on the approved repossession quote.
You can Approve multiple repossession quotes for a contract.
The type of Asset Return created for a Termination Quote for Repossession is Repossession Request.
The Approval workflow process will check if an Asset Return exists for any or all of the assets on the repossession quote. If an asset return exists in a status other than Cancelled, another asset return for the existing asset will not be created. If an asset return exists in a Cancelled status, an asset return in Scheduled status will be created.
Asset returns for all assets on the repossession quote must exist in valid status. The status cannot be Cancelled.
To view or update an asset return request navigate to Asset Management > Return Requests.
Query the contract number or asset number of the Repossession Quote in the Asset Return Request page. The Asset Return Request for the assets on the repossessed contract is displayed with a return status of Scheduled.
To update an Asset Return Request, select Update Asset Return Details from the Asset Return dropdown menu and click Go.
The following table describes Asset Return Request fields:
| Field | Description | Mandatory or Optional |
|---|---|---|
| Return Status | Status of the Asset Return | Mandatory |
| Date Notified | Date notification was sent | Optional |
| Date Title Returned | Date the title was updated | Optional |
| Date Returned | Date the asset was returned | Mandatory |
| Remarketer | Name of the remarketing agent | Optional |
| Date Return Value | The due date of the asset return | Optional |
| Return Value | The fair market value of the asset on the date it was returned | Mandatory |
| Comments | Recorded notes or comments | Optional |
Before a repossession quote can be accepted, the following conditions must apply:
Billing and accruals of the repossession quote must be complete till the repossession quote Effective From date.
All asset returns for the contract should be updated to Repossessed status prior to accepting the termination quote.
To accept a repossession quote, navigate to Asset Management > Termination Quotes > Update Termination Quote and query the contract for which you want to a accept repossession quote.
Select the Accepted checkbox and click Update.
The repossession quote will be accepted and the process will trigger the Termination workflow. The contract will be terminated and the assets will automatically be created in Oracle Fixed Assets with the values derived from the loan repossession setups.
To valuate the repossessed asset, the Loan Administrator must determine its Fair Market Value (FMV). When the FMV is determined, the Loan Administrator can manually writedown the value in Oracle Fixed Assets to FMV if the fixed asset value is less than the FMV.
For more information on the process, see Oracle Assets User Guide.
When these steps are completed, the repossessed asset is ready to be remarketed, scrapped, or re-leased onto another contract.
To create an Asset Repossession Report, run the Generate Pending Asset Repossession Report for Loans concurrent program. This report will display all Approved repossession quotes and associated asset returns. The report can be run for all contracts in an operating unit, or for a single contract in an operating unit.
Creating a termination quote involves identifying the contract and asset for which you are creating the quote.
Use this procedure to create a termination quote. In this procedure, you select a contract to place it in context of the quote. You can specify an Effective Date of the quote. The Effective Date can be a prior date or a future date. If the Effective Date is not specified, the system date will default. You can also choose whether to terminate some or all of the units of each asset line of the contract.
The business rules of the contract determine the type of the termination quote.
For example:
You cannot create an early termination quote if the terms and conditions do not allow early termination quotes
You cannot create a standard termination quote if the terms and conditions allow manual termination quotes only
For standard termination quotes, the amount is calculated based on the terms and conditions set up when the contract is booked.
You can create a manual termination at any time after contract booking. When you create a manual termination quote, you initially follow similar procedures as for creating a standard termination quote. The initial quote amount generated when you create a manual termination quote is simply the value of the outstanding receivables. You normally then edit the manual termination quote by adding your own quote type lines and additional amounts.
The Estimated Billing Adjustment quote line cannot be modified.
Five roles are available for termination quotes:
Recipient: The party to whom you are issuing the termination quote. If you have only one recipient, you do not specify any value in the Percentage field.
Additional Recipient: An optional second party to whom you are issuing the termination quote. If you specify an additional recipient, you must specify the percentage share of billing the additional recipient.
Approver: The person who reviews and approves the termination quote before the recipient receives the termination quote.
Advance Notice: The person who receives notification of the termination quote for a specified number of days before the system sends the termination quote to the recipient. If you specify an advance notice role, then you must specify the number of days delay in the Advance Notice Delay Days field.
Note: You cannot specify both the Approver role and the Advance Notice role in one termination quote.
Courtesy Copy: A third party whom you want to notify of the termination quote for informational purposes.
Your contract must have the following:
One or more assets
A terms and conditions parameter that permits this type of termination quote
For standard termination quotes, terms and conditions set up for the required termination quote calculations
A contract status that permits this type of termination quote.
Perform the following steps using the Termination Quotes page:
Select the applicable option in the Create field and click Go.
The Create Termination Quote page opens.
Select the operating unit.
Note: The list of values includes operating units assigned to the MO: Security profile.
Additional Information: The selected operating unit restricts the valid list of values in applicable fields.
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.
Select the contract number for which you want to create the termination quote.
Enter the Effective Date for the quote.
In the Quote Type field, choose a quote type.
In the Quote Reason field, choose the reason for the quote.
This is a required field.
Note: The list of values in the Quote Reason drop down is based on the access levels defined for the seeded FND lookup type OKL_QUOTE_REASON.
In the Comments field, enter any optional comments that you may want to include.
In the Assets area, select one or more assets to which you want to apply the termination quote.
For each selected asset, enter the number of units to terminate.
The number of units to terminate can be less than the number of units on the asset line of the contract.
If you select all the assets, and do not alter the default number of units to terminate, then this results in a full termination quote; if you do not select all assets, or reduce the number of units to terminate, then this results in a partial termination quote.
During the authoring of the contract, party details may be specified among the Termination Quote Process terms and conditions. If specified, they serve as default values for termination quotes.
You may override the default values by selecting and entering values in the fields in the Parties section of the Create Termination Quote page, to satisfy the following conditions:
Recipient: You must select a contract role in the Recipient row.
Additional Recipient (optional): If you want another recipient for the quote, select a contract role in the Additional Recipient row, and in the Additional Recipient Percentage field further down the page, enter the percentage by which you are splitting the billing for that additional recipient.
Approver (optional): This is the party to approve the termination quote before it is sent. If you select a contract role in the Approver row, then you must leave the Advance Notice row blank, and you must not complete the Advance Notice Delay Days field.
Advance Notice (optional) is the party who receives notification before the quote is sent. If you select a contract role in the Advance Notice row, then you must leave the Approver row blank, and you must also complete the Advance Notice Delay Days field further down the page, which specifies the number of days to delay before the quote is sent.
Courtesy Copy (optional) is the party to notify for informational purposes.
You may enter the email address for any contract role that you select.
Note: You cannot specify both the Approver role and the Advance Notice role in one termination quote.
Click Apply.
Your quote number and quote amount appear in the Termination Quotes or Manual Termination Quotes page.
If you are creating a standard termination quote, this completes the process.
If you are creating a manual termination quote, at this point you have created a basic outline of the manual termination quote, to which you generally add your own quote type lines and additional amounts. For more information, see Add or Remove Manual Termination Quote Lines.
When you terminate a usage line in a Oracle Lease and Finance Management contract, the usage line is automatically terminated in the related Oracle Service Contract (OKS). The business process for terminating a usage contract line consists of the following:
Process a termination quote for a contract in Oracle Lease and Finance Management that has a usage line.
Terminate the usage line in Oracle Lease and Finance Management.
View the terminated line on the associated service contract.
There are certain conditions in which the contract in OKS is terminated versus only when the line is terminated. The OKS contract gets terminated when the Oracle Lease and Finance Management contract is terminated along with any usage lines, in case of full termination. The OKS usage line gets terminated when the Oracle Lease and Finance Management asset line and linked and associated usage line is terminated, in the case of a partial termination of a Oracle Lease and Finance Management asset.
To enable termination of usage contract lines, the billing setups must be completed. For information on billing setups, see Set Up Usage Lines, Contract Authoring.
You can provide user defined calculation and derivation of values to the pre-populated descriptive flex fields where required. The Termination Quote tabs, General, Parties, and Assets provide 15 descriptive flex fields
This section shows how to locate termination quotes, determine which type of termination you are using and whether or not the contract permits early termination, verify that you can offer a termination quote according contract status, and view the amounts to accept the termination quote.
Use the following procedure to:
Search for termination quotes and put the termination quote into context.
Determine whether or not early termination is available for the termination quote.
Specify the type of termination quote for your contract. View the amount details of the termination quote including:
You can perform a list search in the Termination Quotes tab of the Asset Management page. List search is a search tool that helps retrieve information quickly and easily.
Note: You can disable list search using the Disable List Search button in Table Diagnostics. After disabling list search, you can find termination quotes by performing either a simple or advanced search.
A simple search on the Termination Quotes tab includes the following parameters:
Operating Unit (mandatory field)
Quote Number
Customer
Contract Number
Quote Type
Quote Status
Repossession
An advanced search allows you to expand or refine their search criteria.
Your contract has one or more associated assets and permits termination quotes.
With the exception of manually entered termination quote values, the terms and conditions include formulas and outline the required calculations.
The contract status must permit termination quotation, according to what Supported Contract Statuses for Termination Quotes indicates.
Perform the following steps for list search using the Termination Quotes tab:
Click Show Filters.
Note: You can hide filters by clicking Hide Filters.
Select the objects using the following filters:
Operating Unit: Enter the operating unit. This is a mandatory field.
Quote Number: Enter the full or partial quote number.
Customer: Enter the full or partial customer name.
Contract Number: Enter the full or partial contract number.
Quote Type: Select one quote type from the list.
Quote Status: Select one quote status from the list.
Repossession: Select Yes or No based on the quote's repossession status.
You can also include the following additional filters to the search criteria by clicking Add:
Amount: This field uses a range of amounts.
Early Termination
Effective Date: This field uses a range of dates.
Note: You can remove the additional filters from the search criteria by clicking the remove filter icon next to each added criteria.
Click Go.
The search results are displayed. In the search results, click the Quote Number to view the quote details.
You can save searches by performing the following steps:
After selecting filters, click Save.
Perform the following actions in the Create Saved Search region:
Enter a name for the saved search in the Name field.
Select the Display in Tile checkbox to display a tile having this search's details in the Termination Quotes tab.
Additional Information: Tiles display the count of search records for the defined search filters. This count can be refreshed by clicking the refresh icon present on each tile. Clicking on a tile will show the filters selected for this saved search.
Select the Set as Default checkbox to make a saved search as the default search.
Click OK.
Even if a saved search is not saved as a tile, it will be displayed in the drop down beside Show Filters/Hide Filters. You can manage saved searches by clicking Manage Saved Search in this drop down.
The main purpose of a termination template is to determine the following in quotes and requests:
Line types present in the quote or request.
The calculation logic for the line type.
Whether users have the ability to update the system calculated amount in a line type.
Termination Quote Templates are created on the Setup tab under the Quotes subtab. Perform the following steps to create Termination Quote Templates:
Navigate to Setup: Quotes and select Termination Quote Templates.
Click Create. In the Create Termination Quote Templates page, define the following fields:
Operating Unit: The operating unit where the setup will apply.
Quote Reason: One quote reason must be defined for the template.
Quote Type: One quote type must be defined for the template.
Deal Type: Select either Lease or Loan from the drop-down list.
Template Type: Select Quote or Request. This determines whether the template is used for termination quotes or termination requests.
Request Type: Select Re-class or Write-off. Write-of is available only if the template type is Request. Re-class is available if Write-off is selected as Yes. Values are Yes and No.
Valid From: The template is available for selection only after the quote creation date (system date) is equal or later than the Valid From date.
Valid To: The template is not available for selection for any quotes or requests created after the Valid To date. This is an optional field.
Retire At Quote Proceeds: If deselected, the retirement in asset books is accounted at zero which are usually the termination proceeds for default contracts. This is the default option. If the check box is selected, retirement in asset books is based on the quote purchase amount.
Full Termination Only: If you select this check box, the template applies to full terminations only. This is an optional field.
End of Term Only: If you select this check box, the template applies to end of term termination only. This is an optional field.
Add the template lines. Once a template line is added, define the following for each template line:
Line Type: Select a line type from the list of line types. A line type must be selected for it to be present in the quote or request associated with the termination template.
Calculation Basis: Select either Contract or Template from the drop-down. If you select Contract, the calculation is based on the rules defined on the contract's terms and conditions. If you select Template, you must define the calculation logic in the template and this overrides the calculations defined on the contract's terms and conditions.
Early Termination Calculation: If you select Template as the Calculation Basis, a formula must be associated with the template line. The formula selected is used to calculate the values in early terminations for the template line. This field only applies if End of Term Only check box is deselected.
Early Termination Prorate Option: Define a prorate option from the drop-down list to calculate asset level termination amounts. This field applies only if End of Term Only check box is deselected.
End of Term Calculation: If you select Template as the calculation basis, a formula must be associated to the template line. The formula selected is used to calculate the values in end of term terminations for the template line.
End of Term Prorate Option: Select the prorate option from a drop-down list to calculate asset level termination amounts.
Override: Select this to override the system calculated amount for quotes or requests for each template line.
Important: Contract Obligation line type is mandatory in all templates.
Click Apply.
After the template is created, you must activate the termination template for it to be available for use on termination quotes or requests. Search for the template on the Termination Quote Templates page. From the search results table, click Activate.
The check box, Enable Termination Quote Templates, is available under Setup: System Options: Operational Options, in Quoting Options under the Termination Options section. If you select this, then termination quotes require a quote template to be created and activated for the combination of quote type and quote reason selected on the quote.
You can deselect the check box at any point. Termination quotes created after deselecting are not based on quote templates, but on default quote lines and the calculations defined on the contract terms and conditions.
Note: The Enable Termination Templates check box is deselected by default.
If the system option Enable Termination Quote Templates has been selected, the quote types displayed in the following table rely on quote templates for the following components of a quote:
Quote Lines: the quote lines that are displayed, priced and submitted for approval and acceptance.
Quote Line Calculations: The calculation logic for each of the quote lines where the calculation source has been defined as Template.
Quote Lines Overrides: Whether you can update the amount automatically calculated on quote creation.
| Quote Type | Template Required | Quote Lines | Quote Lines Calculations | Quote Lines Overrides |
|---|---|---|---|---|
| With Purchase | Yes | Yes | Yes | Yes |
| Without Purchase | Yes | Yes | Yes | Yes |
| Rollover with Purchase | Yes | Yes | Yes | Yes |
| Rollover without Purchase | Yes | Yes | Yes | Yes |
| Manual with Purchase | Yes | No | No | No |
| Manual without Purchase | Yes | No | No | No |
The following quote types do not require that a template be defined:
Refinance Quote: Although you cannot define a template for the quote type Refinance, you must define a template for the quote type Rollover with Purchase, which is used for the termination quote implicitly created for the termination components of a refinance quote.
Fixed Term Renewal Quote
Recourse with Purchase
Recourse without Purchase
Repossession Quotes
Termination Quotes automatically created on re-lease.
When a quote is created, it is based on the state of the template at the time of creation. If the template is updated, the updated template is used only on quotes created after the updated template is activated.
Providing a quote involves identifying and determining the quote details, reviewing and approving the quote, performing recalculations, and obtaining repurchasing approval.
You can modify the effective dates of a termination quote by changing the termination quote Effective To date. Oracle Lease and Finance Management calculates the termination quote amount based on the current date. The contract terms and conditions include two parameters Quote Effective Days and Quote Effective Maximum Days.
When the termination quote is created:
the Effective From date is set to the current date
the Effective To date is set to the current date + Quote Effective Days
You can modify the Effective To date up to the Effective From date + Quote Effective Maximum Days.
Changing the Effective To date has no impact on the calculated values.
You have created a termination quote.
Perform the following steps using the Termination Quotes page:
Specify search criteria to locate the termination quote:
Quote Number: Enter the full quote number, or specify partial match criteria.
Quote Type: Seeded values may include choices for termination with and without purchase, repurchase, and roll-overs.
Quote Status: You can only modify termination quotes if the quote's status is Drafted or Rejected.
Contract Number: Enter the full contract number, or specify partial match criteria.
Customer Name: Enter the full customer name, or specify partial match criteria
Click the Go button.
Matches appear in the Results area.
In the Results area, in the Quote Number column, click the hypertext link of the quote that you want to change.
The Termination Quote page opens and shows the editable fields.
In the Effective To field, click the Calendar icon and choose the date.
Click Update.
The effective date is the user-specified date used for termination quote calculation. Oracle Lease and Finance Management supports the following two methods of effective date termination:
Prior Dated Termination
Future Dated Termination
The process of terminating a contract on a user-specified date which is before the quote creation date. For prior dated terminations, quote calculation and billing adjustments are processed from the prior effective date. Contract termination is processed on the current date with adjustments from the prior effective date.
For prior dated terminations, you must ensure that the contract start date is later than the following:
termination date of the asset, in case of an early terminated asset.
end date of the asset, in case of expired contracts.
The process of terminating a contract on a user-specified date which is after the quote creation date. For future dated terminations, quote calculation, contract termination, and anticipated billing calculation are processed on the future effective date.
Prior and future effective date terminations can be used with both Full and Partial terminations, Standard and Automated terminations, and termination types of With Purchase or Without Purchase.
Effective date terminations can be viewed in the Lease Center, Customer Self Service, and Vendor Self Service.
Note: : Future dated rollover quotes can be created and Accepted, but cannot be Approved.
It is common for lessors to create future dated terminations quotes and record acceptance before the termination effective date indicated on the quote. Termination processing does not take place until the termination effective date is reached.
If future dated quotes have been created for a contract and the contracts goes evergreen, the quotes must be preserved as customer acceptance may still take place after the contract reaches end of term.
When you create a termination quote, you are allowed to define a Quote Effective From Date greater than the system date, that is, a future date. Standard quote pricing, validations and approval processes apply.
You can create future dated quotes in the following scenarios:
From the base term to a future date within the base term
From evergreen to a future date in evergreen
The Anticipated Billing field in the quote displays the sum of payments due after the current date up to the future effective from date of the quote and the sales tax. This is required for both evergreen and base term quotes.
Net Investment is calculated as follows:
Direct Finance uses Net Investment Balance.
Operating Lease uses Net Book Value.
If the future date is in evergreen, it uses the Net Book Value.
You can accept future dated quotes when the number of days between the current date and the quote effective from date is no larger than the number of days specified in the system option Accept Future Dated Quotes Limit.
Note: The default value for this system option is zero days.
Upon acceptance, the termination invoice is generated with a due date that equals the system date. The actual termination transaction is processed only when the termination date is reached and passing the standard checks.
Note: For future dated quotes, billing and accruals will be run at the time of quote processing until quote effective date (if they have not already been run).
A rollover is a process in which the lessee terminates all or part of an existing transaction, sometimes at a discount, and finances the amount of the termination on a new deal. When the termination amount is added to a new contract, the termination quote is not billed to the lessee, but the amount is instead rolled over to a new contract or existing contract and priced into the new transaction.
In Oracle Lease and Finance Management, rollover termination quotes can be created with or without purchase for securitized and non-securitized transactions. Rollover termination quote amounts are rolled over as a financed amount on a fee line with the fee type of Rollover on a contract or lease sales quote.
Oracle Lease and Finance Management validations determine whether a rollover termination quote can be rolled over on a contract or sales quote. For example, the customer account of the rollover termination quote and the new contract must be the same.
Rollover fee lines cannot be created for external, or third party, termination quotes.
A rollover termination quote can only be accepted by booking a contract with the quote referenced on a rollover fee line.
To create a Rollover Termination Quote, see Create Termination Quote.
Rollover fees can be added to a lease contract during authoring. For information on adding rollover fees to a contract, see Fee Lines.
The system option, Allow Rollover to New Customer, is available at the organizational level as a check box under Setup: System Options: Operational Options: Termination Options: Rollover Options. When enabled, the field Rollover Customer becomes available in the header of quotes with the following quote types:
Rollover With Purchase
Rollover Without Purchase
You can update Rollover Customer field to the following:
Any other customer: The rollover quote, after approval, is available for selection in contracts associated to selected customer and where the contract start date is one day after the quote Effective From date.
None: The rollover quote, after approval, is available for selection in contracts where the contract start date is one day after the quote Effective From date.
You can view and optionally change the amounts of the line types that are the components of a termination quote. After you have created a standard or a manual termination quote, the termination quote amount is visible in the Termination Quotes or Manual Termination Quotes page.
Use this process to see a breakdown of the components of the termination quote, or to change the amounts on the component line types of a termination quote.
Oracle Lease and Finance Management offers the following viewing options:
View the consolidated amount for all the assets for each line type.
View the line details for a specific line type.
View all individual lines for a quote.
You must have created a standard or a manual termination quote. For details, see Create Termination Quote.
Perform the following steps:
Search for the termination quote whose amount details you want to see.
In the Results area, click the Quote Number hyperlink to see the amount details.
In the Amounts tab of the Termination Quote details page, you can optionally change the amount for one or more of the line types. Click the Line Type link by the rendered amounts. The Quote Line details page opens.
Click the Update button and enter the amount for the line type.
If you are viewing the details of a manual termination quote, you can add and remove line types in the Amounts page.
Note: If you are viewing the details of a manual termination quote, you can add and remove line types in the Amounts page. For details, see Add or Remove Manual Termination Quote Lines.
Click Apply.
Click Submit for Approval when finished.
When you update amounts for a quote line, you can update the amount at the line type level as well as for the underlying asset sub-lines. Any quote line level update is pro-rated to the underlying asset sub-lines by applying to the asset sub-line the same percentage entailed in the quote line level update.
When you create a termination quote, the system generates quote amounts for each line based on the contract terms and conditions. You can update the system generated amounts while keeping track of the amounts originally calculated if the line type is marked as eligible for overrides in the associated termination template. In the case of Billed Not Paid lines, the system option, Adjust Billed Not Paid, must also be defined to enable updates. The values in the Override Amount column are the amounts used for termination and accounting transactions. By default, these are the system generated amounts.
When you receive an accepted termination quote with a transaction status of Error, the error must be fixed. After fixing the error, set the contract termination status to Recycle.
To set the contract termination status to Recycle, complete the following steps:
Navigate to Asset Management > Contracts
Select the Contract Number.
Select Terminate from the Action pull-down menu.
In Terminate Transaction, click Go.
For the selected Contract Number, click Recycle to recycle the termination transaction.
Run the concurrent program Terminate Expired Contracts.
When a lease contract's payment schedules are changed by a partial termination quote, Oracle Lease and Finance Management calculates and displays the revised payment schedules. You can then process the termination quote before submitting it.
You have created a partial termination quote that changes payment schedules.
Perform the following steps:
Click the Payment Schedule tab in the Termination Quote details page.
Click the Current Total or Proposed Total hyperlinks to view total amounts for selected stream types listed by asset in the Payment Schedule Details page.
Click the Total hyperlinks to view the stream type and asset amount details in the Payment Schedule Line Details page.
You can build up your manual termination quote by adding or removing quote line types and amounts.
If you have completed the first stage of creating a manual termination quote, you have created the basic outline of the quote. The quote amount calculated will be the value of the outstanding receivables only. Generally you want to add your own quote lines and amounts to the basic termination quote.
The Estimated Billing Adjustment quote line amount cannot be modified or removed.
You must have created the basic outline of a manual termination quote. .
Perform the following steps using the Termination Quotes page:
Search for the manual termination quote to which you want to add quote lines.
In the Results area, click the Quote Number hyperlink to which you want to add your quote lines.
In the Amounts tab of the Termination Quote details page, you can add or remove quote lines.
To add quote line types and amounts, continue at step 5.
To remove quote lines, select the Remove check box for each line type that you wish to remove, then continue at step 11.
In the Amounts page, click Create Quote Line.
The Create Quote Line page appears.
Select the Line Type for the quote line.
Optionally select an asset for the quote line.
Enter the amount for the quote line.
Click Create.
If you want to add more quote lines, repeat steps 5 through 9 for each quote line.
Click Update.
You can specify the serial numbers of assets to terminate on a partial termination quote.
On a partial termination quote, if you are going to terminate one or more assets that are defined as serializable items in Oracle Inventory, then you must select the serial numbers of the units that you wish to terminate.
You have created a partial termination quote.
Each asset on the partial termination quote has been defined as a serializable asset in Oracle Inventory.
You specified serial numbers for the asset or assets when you created the contract.
Perform the following steps:
Search for the termination quote.
In the Results area, in the Quote Number column, click the quote number hyperlink.
The Termination Quote Details page opens.
Click the Assets tab.
In the Assets page, click the icon in the Details column for the asset.
The Asset Units page appears, with header information that includes quote details, asset number, asset quantity, and quote quantity.
If the asset quantity is equal to the quote quantity, click Select All, else click the Select box beside the assets that you want to terminate.
You must select the exact number of assets specified by the quote quantity.
Click Update.
During a partial termination, streams are not generated for the terminated asset as streams are copied and truncated to create a new set of streams.
The active assets generate streams for the following:
Subsidy Accrual
Termination Value
At the contract level, streams are generated for the following:
Amortized Fee Income
Amortized Fee Expense
The following procedure describes how to view streams generated for the active assets.
Perform the following steps in the Contracts tab of the Customers page:
Search for the contract having the split asset.
Click the contract number.
Note: You can go to the Configuration tab in the Contract page to view the terminated and active assets.
In the Contract page, go to the Summary tab.
In the Activation Summary region of the Summary tab, click the details icon corresponding to Activate Contract.
Search for the history streams in the Streams region of the Activate Contract page. To search, you can select the following options:
Status: Select History.
Stream Level: Select Link Service Asset.
The history streams for the impacted split asset are displayed.
Note: The terminated asset in partial terminations does not have any history sets associated with it.
You can view or update information about standard termination quotes. You can update two types of fields in a standard termination quote:
Common Standard Termination Quote Fields: Fields that all standard termination quotes have in common and are not based on termination quote formulas. For more information, see Common Standard Termination Quote Fields.
Quote Line Fields: Fields from the contract's terms and conditions that are based on quote lines. Under certain circumstances, some quote line fields are calculated and based on the termination quote formula. Other quote line fields are not based on the termination quote formula because the formula may have an error or is missing. For more information, see Quote Line Fields.
Common standard termination quote fields are those fields that all standard termination quotes have in common, regardless of being based on the termination quote formula. Common standard termination quote fields that you can update include:
Effective To date: change the ending effective date of the termination quote. Changing this date does not change any calculations.
Pre-Proceeds: Indicate that you are accepting a termination quote before the quote dues are received.
Accepted: Indicate that you have accepted the termination quote.
Comments: Enter any free-form text to make notes about the termination quote.
Parties: Select one or more parties to whom you want to send a quote.
Per Diem Amount: The Per Diem Amount is payable by the customer if the payment is not made on the quote effective date.
You can update certain quote line fields in a standard termination quote depending on whether or not the termination quote formula that you used in the terms and conditions of your contract are correct and complete.
Standard termination quotes rely on the termination quote formula for calculation. You can use the default termination quote formula, or create your own termination quote formula during the implementation of Oracle Lease and Finance Management.
If the termination quote formula is correctly set up in the implementation of Oracle Lease and Finance Management, then Oracle Lease and Finance Management produces a standard termination quote with calculated values; you can update these fields:
Purchase Option Amount
Discount Rate
Termination Penalty
Return Fee
Rollover Incentive
Quote Fee
Estimated Property Tax
Miscellaneous
If any of the required operands are missing from the termination quote formula or if you have not selected any termination quote formula in the contract terms and conditions, then Oracle Lease and Finance Management produces a standard termination quote that comprises only of certain fields, all of which have zero values and require manual updating. This documentation refers to this type of quote as a default standard termination quote. The available fields are:
Purchase Option Amount
Contract Obligation
Discount Rate
Tax / VAT
Miscellaneous
The following steps provide general procedures for searching, viewing, and updating termination quotes.
You have created a standard termination quote.
Perform the following steps:
Search for the termination quote.
In the Quote Number column, click the quote number hyperlink.
The Termination Quote Details page opens.
Optionally, edit the Effective To, Pre-Proceeds, Accepted, or Comments fields. For more information, see Common Standard Termination Quote Fields in the introduction to this topic.
Optionally, edit the available quote line fields.
Available quote line fields vary according to how you implemented the termination quote formula and applied it to the contract. For more information on which quote line fields you can modify, refer to the related topics, including:
Click Update.
For parties specified on the termination quote, you can send the quote to a party from the Termination Quote Details page. To send a termination quote, you must search for it and place it into context.
You have created a termination quote.
Perform the following steps:
Search for the termination quote.
In the Quote Number column, click the quote's number--a hypertext link.
The Termination Quote Details page opens.
In the Parties area under the Select column, select the party to whom you want to send a quote.
Click the Send Quote button.
To send the quote to another party--if available--repeat this subset of steps.
Click the Update button.
Business rules determine the calculated termination quote amounts, but you can update some of the standard termination quote amounts.
The following table shows the supported termination quote line types that you can manually update after the creation of the standard termination quote.
| Line Type | Updatable After Creation of Quote | Available for Default Standard Termination Quotes | Remarks |
|---|---|---|---|
| Purchase Option Amount | Yes | Yes | None |
| Discount Rate | Yes | Yes | None |
| Termination Penalty | Yes | No | None |
| Return Fee | Yes | No | None |
| Rollover Incentive | Yes | No | None |
| Quote Fee | Yes | No | None |
| Estimated Property Tax | Yes | No | None |
| Miscellaneous | Yes | Yes | Standard creation based on the way termination formula is defined. |
The Assets page shows you a view-only list of the asset number, description, and cost of all assets in the termination quote. The purpose of this feature is to let you review the details of assets that you are terminating or are purchasing through a termination quote.
Note: The Assets page includes a Details icon for each asset, that leads to the Asset Units page. The Asset Units page is used to select serial numbers of assets to terminate.
You have created a termination quote.
You have retrieved the termination quote and placed it in context.
No steps are applicable
Use the Anticipated Billing tab on the Termination Quote details page to view the anticipated billing. Anticipated billing represents the sum of amounts due to be billed between the quote creation date and the quote effective date and the sales tax. You must enable the Estimated Billing Tax Extension system option in Transaction Tax Options to customize tax calculation logic.
During the life cycle of the termination quote, Oracle Lease and Finance Management posts error, omission, and information messages. You can review these messages and take action to see that subsequent processing does not fail.
Three types of messages pertaining to terminations quotes are:
Error
Warning
Information
The Messages page shows:
Quote Number
Contract Number
A list of messages and their dates
You have created a termination quote on a contract.
You have retrieved the termination quote and placed it in context.
Use the Messages tab on the Termination Quote details page to view messages. If there has been an error, then rectify the error at the source and regenerate the termination quote, if applicable.
After you enter a standard termination quote, it is submitted for approval automatically and the approval process is controlled by general termination quote workflow. If the termination quote is rejected you need to revise it and create a manual termination quote.
After you create a manual termination quote, its first status is Drafted. To generate the approval process, you need to submit the manual termination quote for approval.
You have created a termination quote.
Perform the following steps using the Termination Quotes page:
Search for the termination quote.
In the Results area, in the Quote Number column, click the quote number hyperlink of the quote that you want to approve.
Click Submit for Approval.
You cannot change the content of the termination quote--such as the Effective To date or the assigned assets--after the status changes to Approved. Business rules determine whom to notify for approval.
The following topics describe the two means of accepting termination quotes:
Accept the Termination Quote Automatically
Accept the Termination Quote Manually
Except for rollover terminations, automatic acceptance of a termination quote happens through the cash application routine of Oracle Lease and Finance Management. The automatic acceptance of termination quote occurs only if:
The termination quote uses the Upon Receipt means of acceptance. The Upon Receipt means of acceptance means that the contract terminates upon receipt of payment before the lessor accepts termination notification.
The amount received matches the termination quote amount. If the amount received upon receipt does not amount the termination quote amount, then you must manually apply the cash received.
On the booking and rebooking of a contract for rollover and release contracts.
In the cash application routine, when the amount received matches the termination quote:
The termination quote is automatically accepted.
The invoice's termination quote lines are generated for transfer to Oracle Receivables.
Use this procedure to manually approve a termination quote when:
The termination quote specifies Pre-Proceeds option. The Pre-Proceeds option terminates the contract upon acceptance notification.
The termination quote specifies to terminate the contract Upon Receipt, but the amount received does not match the termination quote amount.
Quote acceptance terminates the contract and changes its status to Accepted.
You can accept a termination quote two ways:
Pre-Proceeds: The contract terminates upon acceptance notification.
Upon Receipt: The contract terminates upon receipt of payment before the lessor accepts termination notification.
Manual acceptance of termination quote requires you to manually apply in Oracle Receivables the cash receipt to the invoice that the termination quote created and to any other outstanding invoices.
Ensure that the termination quote's status is Approved.
You must run accruals for a contract till the termination quote acceptance date.
Note: While accepting the termination quote, Oracle Lease and Finance Management checks accruals for the contract based on the setup for the Check Accruals Till Previous Month system option. If you have selected this option, then the application checks accruals till Termination Quote Effective From Date's previous month's last day. Otherwise, the application checks accruals till Termination Quote Effective From Date.
Perform the following steps:
Search for the termination quote.
In the Results area in the Quote Number column, click the quote number hyperlink of the quote that you want to change.
The Termination Quote details page opens.
Click Update. The Update Termination quote page appears.
Select the Accepted check box.
Select the Pre-Proceeds check box to terminate the contract upon acceptance.
Click Save.
Assets are terminated by entering a list of assets to terminate into an interface table, and then running a concurrent program. An explicit quote is not required.
The main purpose of the program is to create termination quotes for the assets specified. Generally, the quotes will be for asset-level terminations, also known as partial terminations. If all the assets for a contract are specified to be terminated, then the quote will be for a contract termination.
You can specify whether you wish the quotes to be standard or manual termination quotes. For the standard termination quotes, you can also set a flag to automatically accept the quote, which helps to automate the termination of the asset or contract.
The table that you must populate is OKL_TERMNT_INTERFACE.
Enter the following columns in the table:
TRANSACTION_NUMBER
Enter a unique transaction number. You can either generate your own unique values, or use the seeded sequence OKL_TIF_SEQ.
CONTRACT_NUMBER
ASSET_ID or ASSET_NUMBER
SERIAL_NUMBER
Enter this column if the asset is serialized, and set UNITS_TO_TERMINATE to null or 1.
QUOTE_TYPE_CODE
Set this value to the Code in the FND Lookup Type OKL_QUOTE_TYPE.
For example, specify TER_PURCHASE for a termination with purchase, and TER_MAN_WO_PURCHASE for a manual termination without purchase.
Note: If you specify a code that indicates a standard, that is, non-manual, termination quote, but the contract requires a manual termination quote, the program will generate a manual termination quote that has the appropriate "with purchase" or "without purchase" option.
STATUS
Set this value to ENTERED.
Another important column that automates the asset termination process is AUTO_ACCEPT_YN. If you set the value of this column to Y for standard, that is, non-manual asset termination quotes, then, if the quote is successfully created by the program, it is automatically submitted for approval. When the approval is granted, the quote is processed to completion; that is, the asset or contract is terminated.
After you have entered all the asset information into the OKL_TERMNT_INTERFACE table, run the concurrent program Process Termination Interface Transactions. See Concurrent Programs.
After the program has finished, view the output report to see a summary of the following:
The rows processed
The rows in error
The rows processed, but with errors
An example of a row that is processed but generates an error is if the value of AUTO_ACCEPT_YN is set to Y. The quote may be created successfully, but the automatic acceptance may fail.
When you have a repurchase agreement, the third party--the source or supplier of the leased asset--has agreed to receive the asset according to agreed-upon terms in the repurchase agreement. The agreed-upon terms can be either an amount or a formula. The remarketer requests a quote for the vendor, and the third party approves the quote.
The repurchasing agreement specifies the price that the third party pays the lessor for repurchasing the asset. The price is either a fixed amount or a formula-based amount.
Note: All amounts specified in a repurchase quote are in the ledger currency.
A repurchase agreement exists.
You have received the asset.
Lease Super User, Asset Manager and Remarketer
Assets > Tracking > Vendor Quote > Repurchase Asset
Note: You need to have an asset in context in order to access this area.
No steps are applicable.
Tip: You can optionally edit the Effective To, Comments, Ship To address and phone information.