PeopleSoft Asset Management 9.1 PeopleBook

Working With Leased Assets

This chapter provides an overview of leased assets, lists prerequisites, and discusses how to:

Define payment schedules.
Add or update capital and operating leases.
Create lease expense schedules.
Integrate lease payments with PeopleSoft Payables.
Transfer operating leases.
Retire or reinstate leases.
Generate lease reports.

Understanding Leased Assets

PeopleSoft Asset Management incorporates full lease management functionality, including calculating and printing lease payment schedules, calculating leased asset revenues, and verifying leases as operating or capital leases, in accordance with the United States Financial Accounting Standards Board (FASB) Statement 13. It also provides the ability to define step leases as well as a robust lease payment integration with PeopleSoft Payables for automatic voucher creation.

In PeopleSoft Asset Management, you can retire and reinstate leased assets and track interim payments.

This section discusses:

Capital and operating leases.
Step leases.
Lease payment integration with PeopleSoft Payables.

Note. Your transactions are maintained with multiple currencies if you use them in conjunction with leased assets.

Capital and Operating Leases

There are two basic types of leases: capital leases and operating leases.

A capital lease is treated as a financial asset.

It has a lease term and lease payment amount. The lease is carried on the balance sheet and is periodically depreciated.
An operating lease is treated as a nonfinancial asset to which no cost information is associated. It is normally expensed and can include rent and monthly payments that are expensed periodically.

PeopleSoft Asset Management uses the lease classification rules for capital and operating leases as proscribed by the country requirements that were established during the setup of book location. For example, in the United States, leased assets are defined and governed by Financial Accounting Standards Board (FASB) Statement 13.

Note. The United States FASB 13 lease classification rules apply to all countries unless otherwise noted. For example, in Germany, the threshold for capitalization is 90 percent of the leased asset's economic life, as compared to 75 percent under the United States' generally accepted accounting principles. In Canada, the classification of capital or operating leases is the same as that defined in the United States FASB 13. PeopleSoft Asset Management supports the United States, Germany, Canada, and Australia for least type verification.

Step Leases

A step lease features variable payment amounts and variable timing over the term of the lease.

Examples of step leases include:

Step-down leases with decreasing or declining lease payments.
Step-up leases with increasingly larger lease payments during the lease term.
Skip-payment leases in which payments are not required during certain periods.

This table provides an example of a step-down lease schedule:

Number of Terms	Frequency	Payment Amount
6	Monthly	$400
18	Monthly	$350

This table provides an example of a quarterly step-lease payment schedule. It is suggested that you use three payment schedules with due dates as shown.

Schedule	Due Dates
Schedule 1	January, April, July, October
Schedule 2	February, May, August, November
Schedule 3	March, June, September, December

For an annual step-lease payment schedule, it is suggested that you use 12 payment schedules, with one schedule for each of the 12 months as the payment due date.

Lease Payment Integration with PeopleSoft Payables

You can enable the lease payment integration between PeopleSoft Asset Management and PeopleSoft Payables to automatically generate vouchers for lease payments that are calculated in Asset Management. This includes both capital and operating leases. Additionally, the lease payment schedule segregates the principal and interest of each payment and is used by the Depreciation Close process (AMDPCLOS) to generate the payment accounting entries. The lease payments can be allocated on a monthly basis, in accordance with GAAP, and Asset Management generates the associated monthly accrual accounting entries. Lease Interest Contra and Lease Obligation Contra accounts must be established as clearing accounts, which are offset by the Payables voucher entries. This integration is enabled at the Asset Management business unit level.

See Integrating with PeopleSoft Payables - Sending Lease Payments to Payables.

See Selecting Asset Management Interface Options.

Once you have enabled the lease payment integration with PeopleSoft Payables at the business unit level:

Complete the Payables Integration page within the Leased Assets component with pertinent integration information by asset.
Review payment date, integration status, and Payables information for lease payments that are selected for Payables integration using the Review Payments page.
Approve pending lease payments to Payables (if the pre-approval option is not enabled).
Upload payments to be processed to Payables.
Run AP/AM Payment Reconciliation report.

See Integrating Lease Payments with PeopleSoft Payables.

Defining Payment Schedules

This section discusses how to add or modify payment schedules for leases.

Before you can add leased assets to your system, you must define at least one payment schedule to indicate when a lease starts and ends. Leases can share the same payment schedule ID.

Page Used to Define Payment Schedules

Page Name	Definition Name	Navigation	Usage
Payment Schedules	LEASE_SCH_ID	Set Up Financials/Supply Chain, Product Related, Asset Management, Financials, Payment Schedules, Payment Schedules	Add or modify payment schedules for leases.

Defining Lease Payment Schedules

Access the Payment Schedules page (Set Up Financials/Supply Chain, Product Related, Asset Management, Financials, Payment Schedules, Payment Schedules).

Complete the information about the begin date, end date, lease term, and payment frequency.

Number of Payments Per Year	Enter a value to determine the number of lease payments for the lease schedule.
Prorate Lease Expense	Select to prorate the accounting entries that are generated for lease payments by the depreciation close process (AMDPCLOS) on a monthly basis. The lease payment schedule segregates the principal and interest of each payment and is used by the AMDPCLOS process to generate the payment accounting entries. The prorated amounts are allocated as well according to their respective ChartField distributions.
End of Month Due Date	Select to always schedule a payment on the last day of the month.
Populate	After completing the fields about the payment schedule, click the Populatebutton to automatically populate the Payment Datecolumn fields.

Adding Capital and Operating Leases

This section discusses how to:

Enter basic information about the lease and lease terms.
(Optional) Enter information about cost, ChartFields, and depreciation.
(Optional) View or update a step-lease payment schedule.
View or update a lease payment schedule.

Pages Used to Add Capital and Operating Leases

Page Name	Definition Name	Navigation	Usage
Express Add - Definition	ASSET_LEASE_01	Asset Management, Asset Transactions, Leased Assets, Express Add	Create a capital lease or an operating lease.
Update Lease Information - Definition	ASSET_LEASE_01	Asset Management, Asset Transactions, Leased Assets, Update Lease Information	Update a capital lease or an operating lease.
Express Add - Cost	ASSET_LEASE_02	Asset Management, Asset Transactions, Leased Assets, Express Add, Cost	Enter cost, ChartField, and depreciation data for a leased asset.
Update Lease Information - Cost	ASSET_LEASE_02	Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Cost	Update cost, ChartField, and depreciation data for a leased asset.
Express Add - Step Lease Payment	ASSSET_LEASE_05	Asset Management, Asset Transactions, Leased Assets, Express Add, Step Lease Payment	Enter a step-lease payment schedule.
Update Lease Information - Step Lease Payment	ASSET_LEASE_05	Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Step Lease Payment	Update a step-lease payment schedule.
Express Add - Payment Schedule	ASSET_LEASE_03	Asset Management, Asset Transactions, Leased Assets, Express Add, Payment Schedule	Create or view lease payment schedules.
Update Lease Information - Payment Schedule	ASSET_LEASE_03	Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Payment Schedule	Update lease payment schedules.
Update Lease Information - Operating ChartFields	ASSET_LEASE_06U	Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Operating ChartFields	Update operating lease ChartField information. ASSET_LEASE_06 and ASSET_LEASE_06U are used to allocate operating lease payments to a particular set of ChartFields.

Creating a Lease

Access the Express Add - Definition page (Asset Management, Asset Transactions, Leased Assets, Express Add).

Profile ID

Enter an ID if you want to use the default information from an asset profile to define this asset. You must enter a profile ID for a capital lease because all depreciation information is stored in the profile ID. A profile ID is not required for an operating lease.

Trans Date (transaction date) and Acctg Date (accounting date)

Enter a transaction date and accounting date for the lease. For leases, the payment date is based on the transaction date. For example, if a lease begins in October and you need to start the payments in the same month, enter a transaction date of October 1. The accounting date has no bearing on the payment date.

CAP # (capital acquisition planning number) and Seq # (sequence number)

Select the associated Capital Acquisition Plan number for this leased asset or look up the associated Asset ID Sequence number if one has been assigned.

Trans Code (transaction code)

Select the accounting entry template that is used for transactions relating to this asset.

Asset Type

Select the asset type from the available established values. You must enter Asset Type for operating leases if you do not enter a profile.

Subtype

Select the asset subtype from the available defined values for the selected Asset Type.

Currency

Select the currency for the transactions that are processed with this asset.

Serial ID

Enter the Serial ID that is associated with this asset. Serial IDs track physical inventory, especially for IT assets.

Tag Number

Enter the tag number that is associated with this asset. Tag numbers track physical inventory.

Note. To perform a physical inventory with PeopleSoft Asset Management, your assets must use tag numbers.

Rate Type

The exchange rate that is defined for the default book for the business unit appears by default in this field. You can select a different rate type.

Lease Information

Lease ID and Description	Select from the available lease IDs assign a new ID for this business unit and add a description of the lease. Description is required only if a Lease ID has been assigned.
Vendor ID and Vendor Contact	Select the Vendor ID from the list of available vendors for this asset and enter contact information. Vendor ID is required if Lease ID is assigned.
Responsibility	Enter the name of the person who is responsible for this leased asset. Required if Lease ID is entered.
Acceptance Date	Indicates the date that the lease contract is accepted (signed and returned to the lessor). If you complete the Interim Rent (Monthly) field in the Lease Term group box, you must enter an acceptance date that is earlier than the commencement date of the lease. Interim rent starts on the acceptance date and ends on the commencement date. You enter the amount of the interim rent in the Interim Rent (Monthly) field.
Receipt Date	Enter the date the leased asset is received. This is an information-only date fields for reporting purposes.
Lease End Date	Enter the date the leased asset is received. Lease End Date becomes required when a Lease ID is entered. This date is used for the Lease End Date report.
Display Alert Days	Enter the number of days in advance to receive the Lease End Date pagelet based on the Lease End Date. This field appears only if PeopleSoft IT Asset Management (ITAM) is installed.
Commence Date and Expiration Date	These fields represent the first and last lease payment date (regardless of interim rent), and appear only after you save the page.
Inception Date	This field appears when viewing this page in Update/Display mode. The date that is displayed is the date of the original transaction.
Comment	Enter any comments to be noted for this leased asset.

Note. If LEASE is entered and PeopleSoft ITAM is installed then Description, Lease End Date, Vendor Id and Responsibility are required fields.

Lease Term

Lease Term	Enter the number of periods in this lease.
Estimated Life	The number of periods that you entered in Lease Term field appears by default. You can change this value.
Interest Rate (%) (interest rate percentage)	Enter the approximate percentage of profit the lessor gains by leasing the asset to you. This number must be an annual interest rate percentage in whole numbers.
Borrowing Rate (%)	Enter the interest rate that you would have incurred at the inception of the lease if you had borrowed the necessary funds to purchase the leased asset. This number must be an annual interest rate percentage in whole numbers.
Payment Schedule ID	If you want the system to define a lease payment schedule, enter a payment schedule ID. Capital leases must have a payment schedule ID. The values that you can select are set up on the Payment Schedule page when you specify the payment frequency and number of periods.
Fair Value	Enter the fair value. The system uses the fair value to verify the lease type. It also records this value on the AM_FMV table to use in the asset revaluation process. The system calculates the capitalized lease amount using the lesser of the Present Value Lease Payments and Fair Value field values. If the present value of the lease payments is less than the fair value, the capitalized lease amount equals the present value of the minimum lease payment (MLP). If the fair value is less than the present value of lease payments, the capitalized lease amount equals the fair value. You might want to change the interest rate so that the net present value equals the fair value. If you do not enter a fair value, the capitalized lease amount equals the present value of the MLP.
FV Template ID (fair value template ID)	Select a fair value template, which includes the valuation method, level and premise. If left blank, the fair value is created but the additional valuation information is not provided. See Defining Fair Value Templates.
FV Group ID (fair value group ID)	This field is active only when the selected FV Template ID has a valuation premise of In Use. The default value is supplied from the selected FV Template ID; however, you can override it and select another FV Group ID. See Defining Fair Value Groups.
Guar. Residual Value (guaranteed residual value)	Calculates depreciation based on the amount of the residual value of the leased asset that is guaranteed by the lessee to the lessor and considered as part of the minimum lease payments.

BPO (bargain purchase option)	Select if this lease includes a bargain purchase option, which represents a payment by the lessee to the lessor at the end of the lease term, allowing the lessee to obtain title to the leased property.
BRO (bargain renewal option)	Select if this lease includes a bargain renewal option, which requires a payment if the lease agreement grants the lessee the right to renew or extend the lease. If the agreement specifies that the lease must be renewed or extended, a penalty might be required for failure to renew.
Transfer Ownership end lease	Check if there is an ownership transfer of the asset at the end of the lease period.
Step lease	Select if the lease is a step lease. A step lease features variable payment amounts and/or variable timing over the term of the lease.

Minimum Rental Payment (MRP)

Enter the minimum rental payment. This field is not required for step leases.

Note. You must either enter a minimum rental payment here or complete the cost information on the Cost page. Otherwise, the system cannot calculate the lease payment schedule.

Minimum Lease Payments (MLP)

Display a minimum lease payment.

If there is no bargain purchase option (and you entered a bargain renewal option instead):

MLP = (MRP × Lease Term ÷ 12 periods per year × number of payments per year) + Guaranteed Residual + BRO.
If there is a bargain purchase option:

MLP = (MRP × Lease Term ÷ 12 periods per year × number of payments per year) + BPO.

Present Value Lease Payments

Displays the present value of the lease payments for a step lease.

The system uses two formulas to determine the present value of the total payment for a step lease.

For the first payment in the schedule, the formula looks at the present value of an ordinary annuity for a series of payments of any amount:

P1 = Pymt × ([ 1 – (1 + Intr) ^ -npymt ] ÷ (intr))

where:

P1 = Present value of an ordinary annuity.

Pymt = Periodic payment amount.

Intr = Periodic interest rate.

npymt = Number of payments.
For payments that are made after the first payment, the formula looks at the present value of a single future amount:

P2 = Single_Future_Pymt × (1 ÷ (1 + intr) ^ nper)

where:

P2 = Present value of a single future amount.

Single_Future_Pymt = Future amount.

intr = Periodic interest rate.

nper = Number of periods.

The example illustrates the calculations using an interest rate of 7.2 percent.

Number of Terms	Frequency	Payment Amount
6	Monthly	400 USD
18	Monthly	350 USD

PV1 equals Present value of the first payment in the schedule:

400 USD × ([ 1 - (1 + 0.01) ^ -6 ] ÷ (0.01) ) = 2,350.40 USD

PV2 equals Present value of the second payment in the schedule:

[350 USD × ([ 1 - (1 + 0.01) ^ -18 ] / (0.01) )] × (1 ÷ 1.01 ^ 6) = 5,744.88 USD

Present value of the total cash flow equals: 2,350.40 + 5,744.88 = 8,095.28 USD

Note. The lease term during the renewal period is considered part of the overall lease term.

Capitalized Lease Amount

Enter the cost. The system uses the following method to calculate lease payments:

Capitalized Lease Amount - Prior Obligation Reduction = Residual Capitalized Lease Amount

Residual Lease Amount × (Annual Implicit Interest Rate / Number of Periods per Year) = Interest Expense per Period

Interest Expense per Payment + Obligation Reduction = MRP

For example, this table illustrate a full payment schedule for a simple capital leased asset with a capitalized amount of 10,500 USD, an interest rate of 7 percent, a monthly payment of 908.53 USD, and 12 periods per year:

Period	Residual Capitalized Lease Amount in USD	Obligation Reduction	Interest Expense	Payment in USD
1	10,500.00	847.2800562	61.24994377	908.53
2	9,652.71	852.2225232	56.30747678	908.53
3	8,800.49	857.1938213	51.33617873	908.53
4	7,943.29	862.1941186	46.33588144	908.53
5	7,081.10	867.2235843	41.30641574	908.53
6	6,213.88	872.2823885	36.2476115	908.53
7	5,341.59	877.3707024	31.15929757	908.53
8	4,464.22	882.4886982	26.0413018	908.53
9	3,581.73	887.6365489	20.89345107	908.53
10	2,694.10	892.8144288	15.7155712	908.53
11	1,801.28	898.022513	10.50748703	908.53
12	903.26	903.2609776	5.26902237	908.53

Interim Rent (Monthly)

Enter the amount of monthly interim rent for a capital or operating lease. Interim rent is common for quarterly leases. Interim rent starts on the acceptance date and ends on the commencement date of the lease. Once the lease officially begins, the normal rental payment amount is tracked by the lease payment schedule.

PeopleSoft Asset Management prorates the first month of interim rent. You can see interim rent payments on the Express Add - Payment Schedule page (ASSET_LEASE_03).

Select Capitalize Interim Rent if you want to include these interim payments as part of your asset cost.

Note. You must post journal entries for interim rent each month by running the Depreciation Close process (AM_DPCLOSE).

Capitalize Interim Rent

Select this check box to capitalize. When selected, the interim rent is added to the cost of the leased asset.

Calculate

Click to have the system calculate the lease payment schedule.

Before the system can calculate the lease payment schedule, you must have:

Defined a payment schedule.
Entered (for leases other than step leases) the minimum rental payment on this page or entered cost information on the Express Add - Cost page.
For step leases, entered payment information on the Express Add - Step Lease Payment page.

You can see the results of the calculation on the Express Add - Payment Schedule page.

Lease Payment Type

Select a payment type: Advance or Arrears. You can use either type for both capital leases and operating leases. More details on these two payment types are provided in this table:

Calculation	Advance Payment Type	Arrears Payment Type
Present Value Factor	Total payment terms for present value factor excludes the term of the advance (or first) payment.	Total payment terms for present value factor equal the total terms of the lease.
Present Value of Minimum Lease Payments	Equals: (Present Value Factor × Periodic Payment Amount) + Advance payment.	Equals: Present Value Factor × Periodic Payment Amount.
Amortization Schedule	Period interest expense equals: Capitalized Amount × the period interest rate. The Capitalized Amount used for the first period of the payment excludes the advance payment amount.	Period interest expense equals: Capitalized Amount × the period interest rate.

Advance

Select if an asset is leased with the first payment that is due before the lease begins. For advance payments, the interest expense is not calculated.

If the present value is calculated on a lease with 12 monthly payments of 100.00 USD and an interest rate of seven percent, then the calculated present value factor is 10.6254.

Calculated present value = 100 USD + 10.6254 × 100 = 1,162.54 USD

Arrears

An arrears payment type means that an asset is leased with the payment due at the end of the period. This is the lease payment type by default. If the present value is calculated on a lease with 12 monthly payments of 100.00 USD and an interest rate of seven percent, then the calculated present value factor is 11.5571.

Calculated present value = 11.5571 × 100 = 1,155.71 USD

Lease Type

When you select the lease type, you can verify that you have selected the correct lease type for a country. If you do not select either the Capital or the Operating options, the system selects the lease type for you. The system can verify the lease types for the U.S., Canada, Germany, and Australia. Canada uses the same criteria as the U.S. for classifying capital and operating leases. Germany uses a higher threshold for the lease term (90 percent instead of 75 percent).

Note. You cannot change a lease type from capital to operating or from operating to capital. If you must change the lease type, you must first retire the leased asset and then reenter the lease with the appropriate lease type.

Capital

Select if the lease is a capital lease.

According to FAS13, a capital lease must meet one of the following criteria:

There is an ownership transfer at the end of the lease.
The lease contains a bargain purchase option (BPO).
The lease term is 75 percent or more of the asset life.

In Germany, the lease term is 90 percent of the leased asset's economic life.
The present value of the minimum lease payment is 90 percent or more of the fair value of the asset.

Operating

Select if the lease is an operating lease.

Verify

Click this button to verify if the lease meets the criteria for a capital lease or an operating lease. If the lease type meets the criteria, the system displays a message confirming that the criteria for FAS13 has been met. If you do not select the Capital or Operating option before clicking the Verify button, the system looks at the information that you have entered on this page about the lease, including the country code, and selects the lease type for that country.

Note. This verification test is disabled for leased assets that use an Indian business unit; designation of capital or operating leases is manual for assets in India.

See (IND) Using PeopleSoft Asset Management Options to Meet Indian Requirements.

(Optional) Entering Information About Cost, ChartFields, and Depreciation

Access the Cost page (Asset Management, Asset Transactions, Leased Assets, Express Add, Cost).

If you did not enter a minimum rental payment (MRP) on the Definition (ASSET_LEASE-01) page, you must complete the cost information on this page.

The system uses the cost information on this page to calculate the lease payment schedule. Use the Cost, Chartfields, and Depreciation tabs to enter more details. Because the ChartFields are effective-dated, you can use them to track transfers.

Note. If you are working with a step lease, you do not have to enter any information on this page.

Viewing or Updating a Step-Lease Payment Schedule (Optional)

Access the Express Add - Step Lease Payment page (Asset Management, Asset Transactions, Leased Assets, Express Add, Step Lease Payment).

Access the Update Lease Information - Step Lease Payment page (Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Step Lease Payment).

If you checked the Step lease check box on the Definition (ASSET_LEASE-01) page, you can use this page to change payment information.

Enter a line number, enter the lease term (number of periods), select a payment frequency, and enter a payment amount. For example, you could define a step lease that consists of six monthly payments of 400.00 JPY followed by 18 monthly payments of 350 JPY.

If you are defining a skip payment, enter a payment frequency, the number of lease terms, and a payment amount of zero (0.00).

Note. The line numbers must be in sequential order. For example, if you update a lease schedule and need to insert a row between lines 1 and 2, you can use a line number such as 1.2.

After you are done working with this page, you must return to the Definition (ASSET_LEASE-01) page and click the Calculate button to generate the lease payment schedule.

Viewing or Updating a Lease Payment Schedule

Access the Express Add - Payment Schedule page (Asset Management, Asset Transactions, Leased Assets, Express Add, Payment Schedule).

Access the Update Lease Information - Payment Schedule page (Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Payment Schedule).

The system calculates the payment schedule on this page when you click the Calculate button on the Express Add - Definition page.

You can update the information on this page as needed.

Note. In case of capitalizing the interim rent, payments are noted with a C rather than I next to the payment line. You can change this designation by modifying message number 8015,37, using the PeopleTools Message Catalog.

If you elect to process periodic depreciation accounting entries, the system creates the journal entries that are shown in the following table:

Action	Debits	Credits
Add	AD Accumulated Depreciation FA Leased property under capital leases (capitalized lease amount)	DE Depreciation Expense LO Obligations under capital leases
Adjust	AD Accumulated Depreciation FA Leased property under capital leases (capitalized lease amount)	DE Depreciation Expense LO Obligations under capital leases
Transfer In	FA Leased property under capital leases (capitalized lease amount) DE Depreciation Expense	AD Accumulated Depreciation
Transfer Out	AD Accumulated Depreciation	FA Leased property under capital leases (capitalized lease amount) DE Depreciation Expense
Retire	CA Proceeds [Proceeds] LO Obligations under capital leases [Guaranteed Residual] AD Accumulated Depreciation [Current Reserve] LO Obligations under capital leases [Remaining Lease Payments]	LG Guaranteed Residual Payable [Guaranteed Residual] FA Leased property under capital leases [Current Cost] GL Gain/Loss on leased property [Remaining Payments + ((Proceeds − Removal Cost) + (Cost − Reserve))

Creating Lease Expense Schedules

This section discusses how to create lease expense schedules by running the Lease Expense Schedule process.

You must run this process:

After setting up a step lease.
After adjusting transactions in a step lease.
Before running the depreciation close process.

Note. The purpose of running the lease expense schedule process is to prorate payment and interest expenses so that the proper amounts are sent to the general ledger (GL) according to the FASB. You must run this process for all leases that have non-monthly payment schedules.

AMLSESCH reads PS_LEASE_SCHEDULE and creates PS_LEASE_SCHED2, which contains all the step-lease non-monthly payment information. AM_DPCLOSE reads PS_LEASE_SCHED2 (through PS_LEASE_CHART3_vw) to distribute the payment and interest expenses to the GL.

The Lease Expense Schedule process spreads non-monthly lease payments (such as quarterly payments) throughout the year, dividing them into monthly amounts on the lease expense schedule. The results are different for capital leases and operating leases:

For operating leases, the lease expense schedule allocates non-monthly payments to monthly amounts.
For capital leases, the lease expense schedule allocates non-monthly interest expense to monthly amounts, and the payment amount is fully allocated on the date that the payment is due.

The following example uses an arrears type lease for a quarterly payment:

Payment Date	Payment Amount	Interest Expense
June 1, 2009	300	33

The lease expense schedule allocates the payments as shown:

Payment Date	Payment Amount	Interest Expense
April 1, 2009	0.00	11
May 1, 2009	0.00	11
June 1, 2009	300	11

If the general ledger period is closed, the allocation is carried forward to the next open period.

Note. Operating leases do not have interest expense on the payment schedule.

Page Used to Run the Lease Expense Schedule Process

Page Name	Definition Name	Navigation	Usage
Lease Expense Schedule	LEASE_SCHED2_RQST	Asset Management, Asset Transactions, Leased Assets, Create Expense Schedule, Create Expense Schedule	Run the lease expense schedule process.

Running the Lease Expense Schedule Process

Access the Create Expense Schedule page (Asset Management, Asset Transactions, Leased Assets, Create Expense Schedule, Create Expense Schedule).

Select Open Trans Range (select open transaction range)

If you select this option, use the From Open Trans and To Open Transfields to select a range of transaction values.

Select Asset Range

If you select this option, use the From Asset and To Assetfields to select the asset range.

Integrating Lease Payments with PeopleSoft Payables

This section discusses how to:

Enable the lease payment integration.
Set up clearing accounts.
Set up lease payment integration information by asset.
Review and approve lease payment information.
Upload lease payments to Payables.
Run AP/AM Payment Reconciliation report.

Page Used to Integrate Asset Management Lease Payments with PeopleSoft Payables

Page Name	Definition Name	Navigation	Usage
Asset Management Definition - Interface Options	BUS_UNIT_INTFC_OPT	Set Up Financials/Supply Chain, Business Unit Related, Asset Management, Asset Management Definition, Interface Options	Enable the Asset Management lease payment integration with PeopleSoft Payables for a business unit.
Payables Integration	ASSET_LEASE_07	Asset Management, Asset Transactions, Leased Assets, Express Add, Payables Integration Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Payables Integration	Select Payables integration information by asset for each scheduled payment.
Review Payments	LEASE_INTFC_REVW	Asset Management, Send/Receive Information, Approve Lease Information, Review Payments, Review Payments	Review lease payment information and payment status for scheduled or processed lease payments to Payables.
Approve Payments	LEASE_INTFC_APPR	Asset Management, Send/Receive Information, Approve Lease Information, Approve Payments, Approve Payments	Review and approve lease payments that are scheduled to interface with Payables (if the pre-approval option is not enabled for the business unit).
Lease Payments to Payables	AMAPLEAPMT_RQST	Asset Management, Send/Receive Information, Load Interface, Lease Payments to Payables, Lease Payments to Payables	Run the Lease Payments to Payables (AMAPLEASE) Application Engine process.
AP/AM Payment Reconciliation	AMAPLEAPMT_RQST	Asset Management, Financial Reports, Leased Assets, AP/AM Payment Reconciliation, AP/AM Payment Reconciliation	Run the AP/AM Payment Reconciliation report

Enabling the Lease Payment Integration

Access the Asset Management Definition - Interface Options page (Set Up Financials/Supply Chain, Business Unit Related, Asset Management, Asset Management Definition, Interface Options).

The lease payment integration sends to Payables the information that is stored in the book that is defined as the Lease Book on the AM Business Unit Definition page.

Enable the lease payment integration for the business unit by selecting the Lease Interface Processing check box. Additionally, select whether to auto approve vouchers and enter the default Payables business unit on the Interface Options page.

See Selecting Asset Management Interface Options.

Setting Up Clearing Accounts

Set up Lease Obligation Contra and Lease Interest Contra accounts as clearing accounts. Both accounts are credited in Asset Management and debited subsequently during the voucher posting process in Payables. The following table presents an example of lease payment entries within the respective applications using the LPY accounting entry template:

Application	Account	Debit	Credit	Distribution Type
Asset Management	Lease Obligation	950		LO
Asset Management	Lease Obligation Contra		(950)	LP
Asset Management	Lease Interest Expense	50		LI
Asset Management	Lease Interest Contra		(50)	LC
Payables	Lease Obligation Contra	950
Payables	Lease Payable		(950)
Payables	Lease Interest Contra	50
Payables	Lease Payable		(50)

See Creating Accounting Entry Templates.

Setting Up Lease Payment Integration Information by Asset

Access the Payables Integration page (Asset Management, Asset Transactions, Leased Assets, Express Add, Payables Integration ) or (Asset Management, Asset Transactions, Leased Assets, Update Lease Information, Payables Integration).

Payment Date

The default payment dates are populated from the Payment Schedule page. You can update the payment dates as needed.

Payment Total

Displays the payment amounts that are established on the Payment Schedule page. This field is not editable.

Payables Integration

Select only those lines that you want to forward to Payables for payment. If a line is not selected, then the other fields are not editable. By default, this check box is selected for every line for which the business unit has been enabled for integration with Payables.

AP Business Unit

Displays the default Payables business unit from the business unit level (Interface Options page). You can enter a different business unit (there are some cases where multiple Payables business units pertain to the same AM business unit).

Voucher ID

Displays the PeopleSoft Payables voucher ID once the transaction has been processed by the integration and Payables has created the voucher.

Invoice Number

(Optional) Enter the invoice number to appear in the Payables voucher.

Payment Status

Displays the integration status. Valid values for this field are:

Approved-Auto - Initial status when the Auto Approve check box is selected at the business unit level (Interface Options page). Transaction has not yet been processed.

Pending Approval - Initial status when the Auto Approve check box is not selected at the business unit level (Interface Options page). Transactions with this status must be approved before processing.

Approved - Transaction is approved and ready for integration processing to Payables.

Error - Transaction did not process successfully.

In Process - Transaction is currently being processed by the integration to Payables.

On Hold - Transaction has intentionally been detained from processing to Payables.

Processed - Transaction has been successfully processed through the integration to Payables and the voucher has been created.

Sent to AP - Transaction has been successfully processed through the integration to Payables.

Cancelled - Transaction has been intentionally omitted from processing. This is for tracking purposes since deselecting the Payables Integration check box produces the same outcome.

When a transaction is approved or processed through the integration, the transaction line is no longer editable. All fields are unavailable except the Voucher ID field, which becomes link to the corresponding voucher within PeopleSoft Payables. The voucher information is access through a new window.

Reviewing and Approving Lease Payment Information

Access the Review Payments page (Asset Management, Send/Receive Information, Approve Lease Information, Review Payments, Review Payments ).

Use the Review Payments page to review the integration status of the lease payments, select or deselect to send payments through the Payables Integration process and change the Payables business unit, if needed, for payments that are not yet approved or processed.

Select the desired parameters and click the Search button to retrieve payments for review.

Asset Identification	Displays the asset ID for the lease payment based on the criteria that you provide.
Payment Status	Displays the payment status. See Setting Up Lease Payment Integration Information by Asset.
Payables Integration	Select those lines that you want to forward to Payables for payment. If a line is deselected, then the other fields are not editable. By default, this check box is selected for every line for which the business unit has been enabled for integration with Payables.
AP Unit	Select a different Payables business unit for a transaction, if necessary, and save the page.

Access the Approve Payments page (Asset Management, Send/Receive Information, Approve Lease Information, Approve Payments, Approve Payments ).

Use the Approve Payments page to review, approve, or change the payment status of the lease payments. This page is similar to the Review Payments page except that you can change the payment status on this page.

Select the desired parameters and click the Search button to retrieve payments that are eligible for approval.

Asset Identification	Displays the asset ID for the lease payment based on the criteria that you provide.
Payment Status	Displays the current payment status. Select to approve or change the current payment status of the lease payment.
Payables Integration	Override the current payables integration selection. Select lines that you want to forward to Payables for payment. Deselect to keep a transaction from being sent through the integration process. Once deselected, the payment will not show up again in a future search.
AP Unit	Override the Payables business unit for a transaction, if necessary, and save the page.

Uploading Lease Payments to Payables

Access the Lease Payments to Payables page (Asset Management, Send/Receive Information, Load Interface, Lease Payments to Payables, Lease Payments to Payables )

Run the Lease Payments to Payables (AMAPLEASE) Application Engine process. Select the criteria for the lease payments to process for the integration.

This process populates the voucher build integration tables with the necessary information for Payables processing. Payables then continues to process the lease payments from the voucher build staging tables to create the corresponding vouchers. When the vouchers are generated, Payables inserts the voucher ID and line number into the Asset Management records. The lease payment information is reflected in the asset-related fields at the distribution level.

The lease ID is displayed on the Invoice Information page within Payables.

See Entering and Processing Vouchers Online: General Voucher Entry Information.

Note. To avoid the potential risk of resending these payments to Asset Management as adjustments to existing assets, Payables assigns a unique origin source for vouchers that are created from the lease payment integration with Asset Management.

Business Unit	Select the Asset Management business unit from which to process payments. The default value is the business unit that is specified within user preferences.
Profile ID	(Optional). Select to limit integration processing to a specific profile. Only profiles that are associated with leased assets are available.
Invoice Date	Select the date to be displayed on the Payables voucher. If blank, the system supplies the default system date.

Running the AP/AM Reconciliation Report

Access the AP/AM Payment Reconciliation page (Asset Management, Financial Reports, Leased Assets, AP/AM Payment Reconciliation, AP/AM Payment Reconciliation).

Run the AP/AM Payment Reconciliation (AMAP1001 ) report. The reconciliation process compares information about the lease payments from the Asset Management tables with the voucher information that is stored in the Payables tables. The resulting report includes the Asset Management lease payment schedule with payment statuses along with the corresponding Payables voucher information, such as voucher ID, invoice date, payment amount, voucher status and payment status.

Business Unit	Select the Asset Management business unit for which to process the reconciliation report. You can select from the business units for which the integration is enabled.
AP Business Unit	(Optional). Select the Payables business unit for which to process the reconciliation report information.
From Date and Through Date	(Optional). Select the date range for which to run the reconciliation report.

Transferring Operating Leases

This section describes how to transfer an operating lease.

Page Used to Transfer Operating Leases

Page Name	Definition Name	Navigation	Usage
Operating Lease Chartfields	LEASE_OPER_TFR_01	Asset Management, Asset Transactions, Leased Assets, Transfer Operating Lease, Operating Lease Chartfields	Transfer an operating lease, for example, from one department to another.

Transferring an Operating Lease

Access the Operating Lease Chartfields page (Asset Management, Asset Transactions, Leased Assets, Transfer Operating Lease, Operating Lease Chartfields).

This page displays the current ChartFields for the lease.

Use the New Chartfields section to change the Oper Unit(operating unit), Fund Code, Department, Program, Class Field, Budget Reference, Product, Project,and Category. The Category field is required for an operating lease.

Click the Edit Trans Dates button to change the transaction date.

Retiring or Reinstating Leases

Leased assets are retired or retired and reinstated using the same processes as all other assets. Review those sections of this PeopleBook for more information.

Generating Lease Reports

PeopleSoft Asset Management has several reports that you can use to view information about leases that is required to satisfy generally accepted accounting principles (GAAP) and to comply with FAS 13. You can use the lease reports provided to view when a lease expires, create an annual footnote disclosure report, view summary or detail information about a specific lease, or view a lease amortization schedule.

You may also review operating leases.

You must run the Lease Expense Schedule (LEASE_SCHED2) process before you run a lease report.

This section discusses the:

Lease Expiration report.
Lease Footnote Disclosure Summary and Lease Footnote Disclosure Detail reports.
Lease Summary Information, Lease Detail Information, and Lease Amortization Schedule reports.
AP/AM Payment Reconciliation report.

Note. PeopleSoft IT Asset Management also provides a report called Lease End Date.

Pages Used to Generate Lease Reports

Page Name	Definition Name	Navigation	Usage
Lease Expiration	RUN_AMLE2400	Asset Management, Financial Reports, Leased Assets, Lease Expiration	Define the run parameters for the Lease Expiration report (AMLE2400). Use the report to list leases that expire as of today's date, after a certain number of days from a specified date, or within a date range that you select.
Lease Footnote Disclosure	RUN_AMLE2300 RUN_AMLE2310	Asset Management, Financial Reports, Leased Assets, Footnote Disclosure	Define the run parameters for a Lease Footnote Disclosure Detail and Lease Footnote Disclosure Summary reports (AMLE2300 and AMLE2310, respectively). Use at the end of each fiscal year to view all outstanding capital and operating lease commitments for the next five years. The report also provides the monthly lease payment and yearly totals.
Lease Information	RUN_AMLE2000	Asset Management, Financial Reports, Leased Assets, Summary or Detail	Define the run parameters for the following reports: Lease Summary Information (AMLE2000) Lease Detail Information (AMLE2100) Detail Amortization Schedule (AMLE2200)
AP/AM Payment Reconciliation	AMAPLEAPMT_RQST	Asset Management, Financial Reports, Leased Assets, AP/AM Payment Reconciliation, AP/AM Payment Reconciliation	Run the AP/AM Payment Reconciliation report See Running the AP/AM Reconciliation Report.

Profile ID	Enter an ID if you want to use the default information from an asset profile to define this asset. You must enter a profile ID for a capital lease because all depreciation information is stored in the profile ID. A profile ID is not required for an operating lease.
Trans Date (transaction date) and Acctg Date (accounting date)	Enter a transaction date and accounting date for the lease. For leases, the payment date is based on the transaction date. For example, if a lease begins in October and you need to start the payments in the same month, enter a transaction date of October 1. The accounting date has no bearing on the payment date.
CAP # (capital acquisition planning number) and Seq # (sequence number)	Select the associated Capital Acquisition Plan number for this leased asset or look up the associated Asset ID Sequence number if one has been assigned.
Trans Code (transaction code)	Select the accounting entry template that is used for transactions relating to this asset.
Asset Type	Select the asset type from the available established values. You must enter Asset Type for operating leases if you do not enter a profile.
Subtype	Select the asset subtype from the available defined values for the selected Asset Type.
Currency	Select the currency for the transactions that are processed with this asset.
Serial ID	Enter the Serial ID that is associated with this asset. Serial IDs track physical inventory, especially for IT assets.
Tag Number	Enter the tag number that is associated with this asset. Tag numbers track physical inventory. Note. To perform a physical inventory with PeopleSoft Asset Management, your assets must use tag numbers.
Rate Type	The exchange rate that is defined for the default book for the business unit appears by default in this field. You can select a different rate type.

Select Open Trans Range (select open transaction range)	If you select this option, use the From Open Trans and To Open Transfields to select a range of transaction values.
Select Asset Range	If you select this option, use the From Asset and To Assetfields to select the asset range.

Payment Date	The default payment dates are populated from the Payment Schedule page. You can update the payment dates as needed.
Payment Total	Displays the payment amounts that are established on the Payment Schedule page. This field is not editable.
Payables Integration	Select only those lines that you want to forward to Payables for payment. If a line is not selected, then the other fields are not editable. By default, this check box is selected for every line for which the business unit has been enabled for integration with Payables.
AP Business Unit	Displays the default Payables business unit from the business unit level (Interface Options page). You can enter a different business unit (there are some cases where multiple Payables business units pertain to the same AM business unit).
Voucher ID	Displays the PeopleSoft Payables voucher ID once the transaction has been processed by the integration and Payables has created the voucher.
Invoice Number	(Optional) Enter the invoice number to appear in the Payables voucher.
Payment Status	Displays the integration status. Valid values for this field are: Approved-Auto - Initial status when the Auto Approve check box is selected at the business unit level (Interface Options page). Transaction has not yet been processed. Pending Approval - Initial status when the Auto Approve check box is not selected at the business unit level (Interface Options page). Transactions with this status must be approved before processing. Approved - Transaction is approved and ready for integration processing to Payables. Error - Transaction did not process successfully. In Process - Transaction is currently being processed by the integration to Payables. On Hold - Transaction has intentionally been detained from processing to Payables. Processed - Transaction has been successfully processed through the integration to Payables and the voucher has been created. Sent to AP - Transaction has been successfully processed through the integration to Payables. Cancelled - Transaction has been intentionally omitted from processing. This is for tracking purposes since deselecting the Payables Integration check box produces the same outcome. When a transaction is approved or processed through the integration, the transaction line is no longer editable. All fields are unavailable except the Voucher ID field, which becomes link to the corresponding voucher within PeopleSoft Payables. The voucher information is access through a new window.