PeopleSoft Real Estate Management 9.1 PeopleBook

Establishing Real Estate Management Business Units and Accounting Rules

This chapter provides overviews of real estate management business units and accounting rules and discusses how to:

Create real estate management business units.
Establish real estate management accounting rules for lease administration.

Understanding PeopleSoft Real Estate Management Business Units

To define PeopleSoft Real Estate Management business units, use the LA Business Unit Definition component (RE_BUS_UNIT).

PeopleSoft Real Estate Management defines a business unit as an operational subset of your organization that enables you to plan your operations around the way that you work. You can use a business unit to define regional or departmental units in an organization.

Before you begin the day-to-day operation of your PeopleSoft Real Estate Management system, you must create a real estate management business unit which is the backbone of your PeopleSoft Real Estate Management system. You associate each lease to a real estate management business unit, and the system populates many lease attributes by default from the values that you define for that business unit.

As you plan the optimal structure for your PeopleSoft Real Estate Management system, keep in mind its position in Oracle's PeopleSoft suite of applications. A real estate management business unit reads property data from the asset repository based on the asset management business unit and supplies payment data to PeopleSoft Payables based on the payables business unit, invoice data through the Transaction Billing Processor to PeopleSoft Billing based on the contracts business unit, and accounting information to the general ledger based on the general ledger business unit. Therefore, you must establish business units for PeopleSoft Asset Management, Payables, Contracts, and General Ledger before you establish real estate management business units.

After you establish business units for the other PeopleSoft applications, PeopleSoft Real Estate Management can map to the applications. Be careful when selecting the appropriate business units. Make sure that all of the mappings make sense within the suite and that the other products map to the same business units in their respective setup components. For example, assume that you establish a real estate management business unit of US001 and map it to a general ledger business unit of US001 for straightline accounting entries. Most likely the payables business unit and billing business unit match the same general ledger business unit of US001 because PeopleSoft Payables and PeopleSoft Billing also post accounting entries to PeopleSoft General Ledger for lease commitments in the Lease Administration feature.

See Understanding Asset Management Business and Cash Generating Units.

See Defining General Ledger Business Units.

See Understanding PeopleSoft Payables Business Units.

Understanding PeopleSoft Real Estate Management Accounting Rules

To define PeopleSoft Real Estate Management accounting rules, use the LA Accounting Rules Definition component (CA_ACCT_RULES).

Accounting rules for PeopleSoft Real Estate Management are essential for providing lease transactions with appropriate accounting entries sent to PeopleSoft Payables, Billing, and General Ledger. PeopleSoft Payables and Billing provide the offsetting entries to the expense or revenue accounting passed over. You must specify default accounting rules for each transaction destination with an option of providing defaults for each transaction group. You can further define accounting for specific transaction codes within a transaction group that requires its own set of accounting rules. For example, you can set up a standard accounting rule for the transaction group of operating expenses with a transaction destination of PeopleSoft Payables.

When operating expense transactions are generated and are sent to PeopleSoft Payables the defined standard accounting rule for those transactions are applied and sent as well. If a specific operating expense such as janitorial services has a unique account requirement, you can set up an accounting rule for the transaction destination of PeopleSoft Payables, transaction group of operating expenses, and a transaction routing code for janitorial services with the accounting specific to janitorial services.

Three sets of debit/credit pairs are defined in the lease administration accounting rules for PeopleSoft Real Estate Management:

Transactions sent to the PeopleSoft Billing (BI) destination contain accounting rules that credit the revenue.

The offset of Accounts Receivable is determined in PeopleSoft Billing setup.
Transactions sent to the PeopleSoft Payables (AP) destination contain the debit to expenses.

The offset of Payable is determined in PeopleSoft Payables setup.
Transactions sent to the PeopleSoft General Ledger (GL) destination contain both the debit and credit accounts as these are the straightline accounting entries generated from PeopleSoft Real Estate Management.

The following table shows the valid and invalid combinations that can exist in the accounting rules for PeopleSoft Real Estate Management. Edit checking is added to the Accounting Rules for Lease Administration page to ensure that only valid combinations are saved:

Transaction Destination	Transaction Group	Valid Combination?
AP	Base Rent	Yes
BI	Base Rent	Yes
GL	Base Rent	No
AP	Security Deposit	Yes
BI	Security Deposit	Yes
GL	Security Deposit	No
AP	Straightline Accounting	No
BI	Straightline Accounting	No
GL	Straightline Accounting	Yes
AP	Operating Expense	Yes
BI	Operating Expense	Yes
GL	Operating Expense	No
AP	Percent Rent	Yes
BI	Percent Rent	Yes
GL	Percent Rent	No
AP	Miscellaneous Rent	Yes
BI	Miscellaneous Rent	Yes
GL	Miscellaneous Rent	No
AP	Manual Fee	Yes
BI	Manual Fee	Yes
GL	Manual Fee	No

Creating Real Estate Management Business Units

After you determine how many business units that you use and how to organize them, you must define PeopleSoft Real Estate Management-specific business unit definitions. A business unit definition specifies the transaction processing defaults and configuration options associated with the business unit. Two pages are used to define real estate management business units:

The Business Unit Definition General page.
The Business Unit Definition Transaction Settings page.

This section lists prerequisites and discusses how to:

Define real estate management business units.
Define real estate management business unit transaction settings.

Prerequisites

You must establish at least one assets, billing, contract, payables, and general ledger business unit in each of those respective applications to map to the Real Estate Management business unit when it is created. You must also set up a PeopleSoft calendar to define the term calendar ID and percent rent calendar ID to define the proration method.

Pages Used to Establish Real Estate Management Business Units

Page Name	Definition Name	Navigation	Usage
Lease Administration Business Unit Definition - General	RE_BU_CFG1	Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Business Unit Definition, General	Create or update a Lease Administration business unit definition. This page enables you to set various configuration options, such as the mappings to other business units, the auto-straightline option, the general limits and measures, and lease expiration notifications.
Lease Administration Business Unit Definition - Transaction Settings	RE_BU_CFG2	Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Business Unit Definition, Transaction Settings	Define transaction processing options, such as processing lead time and default transaction routing codes.

Defining Real Estate Management Business Units

Access the Lease Administration Business Unit Definition - General page (Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Business Unit Definition, General).

Business Unit

When you add a business unit, you must provide a description and specify a value in the Default SetID field.

Business Units

General Ledger	Select a general ledger business unit. This general ledger business unit defines the accounting processing for the associated real estate management business unit for straightline accounting entries. All leases with straightline accounting entries created for this real estate management business unit post to the general ledger business unit specified here. Note. Transactions generated through the PeopleSoft Payables and PeopleSoft Billing interfaces are posted through those respective applications.
Asset Management	Select an asset management business unit. Properties are considered assets and are contained within the master asset repository. The asset management business unit (AMBU) defines the property asset information associated with this real estate management business unit. All leases created use the PeopleSoft Asset Management property information to manage the life cycle of the lease for the property specified on the lease from the AMBU. Because PeopleSoft Asset Management might post accounting entries to the general ledger for its own purposes (such as capitalization), properties selected on leases under this real estate management business unit are restricted to only the property assets under the business unit mapped here.
Accounts Payable	Select a payables business unit. All payments made for leases under a real estate management business unit are sent to Payables for processing using this business unit.
Contracts	Select a contracts business unit. When creating a lease in the real estate management business unit, a contract header and line is also created in the contracts business unit. This initiates the transaction billing processor within the contracts business unit to determine the routing of the rent to be billed.

Journal Template

General Ledger

Select the general ledger template to be associated with the real estate management business unit. Accounting entries created for this real estate management business unit use this general ledger accounting template to generate the journal in PeopleSoft General Ledger.

Auto Straightline

PeopleSoft Real Estate Management provides the ability to support the accounting and reporting for operating leases by allowing you to enable or disable the straightline processing at the business unit level. For example, let's say that a tenant agrees to rent a space from the landlord. Under FASB-13 Operating Lease provisions, if the rent amount or recurring expense amount for the rented space is not evenly termed across periods, or free rent (zero rent) is applicable for certain periods, those amounts must be reported in the PeopleSoft General Ledger on a straightline basis (an even distribution).

See Understanding Straightline Accounting.

Rent & Miscellaneous Rent

Select to enable base rent and miscellaneous rent transactions to use the straightline accounting process by default for this real estate management business unit. This mechanism assists with lease entry. When a new lease or recurring rent term is added, the straightline check box is automatically selected or cleared based on the setting defined here. You can deselect the check box on the lease from the default value defined on the business unit to enable or disable straightline processing on specific financial terms on a specific lease.

Operating Expenses

Select to enable operating expense transactions to automatically perform straightline accounting processing for this real estate management business unit. When a new lease or an operating expense is added, the straightline check box is selected or cleared by default based on the setting defined here. You can deselect the check box on the lease from the default value defined on the business unit to enable or disable straightline processing on specific financial terms on a specific lease.

Limits and Measures

Unit of Measure	Select the default unit of measure for referencing the space measurement of a property in a lease for this real estate management business unit. Values are: Square Feet and Square Meters .
Base Currency	Select the default base currency for this real estate management business unit. Lease transactions created in this real estate management business unit automatically inherit this base currency, although you can override the base currency on the lease. The currency specified on the lease is the currency used for invoicing or payment by PeopleSoft Billing and PeopleSoft Payables, respectively.
Percent Rent Calendar ID	Select the detail calendar ID. Percent rent sales reporting uses a specific calendar with distinct periods and start and end dates. The detail calendar that you select provides the system with the appropriate information to understand the frequency with which you report or receive sales reports. In addition, this calendar structure enables the system to search for and determine when sales reports are missing, as well as to prevent duplicate sales reports for the same period. See Defining Detail Calendars.
Rate Type	Select the currency exchange rate type to be used when the system must perform currency translations for this business unit. Note. The most commonly used rate type is CRRNT (current).
Percent Rent	Define the percentage tolerances for a sales category amount for this real estate management business unit. This value is used for visual purposes on the sales report only. If a sales report category amount has changed significantly over the previous month, the system displays a warning message on the sales reporting entry worksheet to indicate that it has exceeded the tolerance.
Operating Expenses	Define the percentage tolerance for operating expense amounts for this real estate management business unit. This value is used for visual purposes on the operating expense audit page only. If an operating expense category amount has changed significantly over the previous year, the system displays an icon on the operating expense audit/reconciliation worksheet to indicate that it has exceeded the tolerance.
Proration Method	Defines the rule that the system uses to determine how much to apportion to the recurring rent based on the term calendar and the proration method that you define on the lease. The term calendar determines the start and end date of the billing period. If the term start date does not correspond with the calendar period start date, the payment for the first period will be for the prorated period. For example, if you use the normal monthly calendar, January to December, and base rent starts on 01/12/2005, then the first payment must be for the prorated amount for the time frame 01/12/2005 to 01/31/2005. The system also performs proration when the term end date does not correspond to the calendar period end date. The selection drives the default while setting up the recurring terms on the lease. You can override the default. Available methods for proration are: 360 Days: Select to prorate on monthly frequencies, where each month has only 30 days. 365 Days: Select to prorate according to a standard 365 day Gregorian calendar using each of the 12 months as the start and end dates (31 days in January, 28 or 29 days in February, 31 days in March, and so on). This method supports weekly, monthly, quarterly, and annual frequencies. No Proration: Select if you do not want the proration method for the rent provided by default. You can define the proration method at the lease level.
Lease Calendar	Define the lease calendar, which the system populates on all financial terms of the lease by default for this business unit. The lease calendar determines the start and end date of billing periods for recurring financial terms. You must select a calendar with a 12 period monthly allocation type. See Setting Up Calendar Builder.

Lease Expiration Notification

The Transaction Generator Application Engine (RE_GENTRANS) includes a process that automates lease expiration. The automated lease expiry process sets the status of any active lease to expired when the lease end date precedes the execution date of the transaction generator. The Lease Expiration Notification option determines how the automated lease expiry process treats leases attached to the current business unit.

Notify Only

Select to have the lease expiry process send an email notification when a lease is due to expire. The status of the lease is not changed. The notification email is sent to the Lease Administrator and Portfolio Manager named on the lease.

Update Only

Select to automatically set the status of a lease to Expired when the lease end date has passed. No notifications are issued, however, a system generated note is added to the lease to record the expiration.

Notify and Update

Select this option to automatically set the status of a lease to Expired when the lease end date has passed. A notification email is sent to the Lease Administrator and Portfolio Manager named on the lease. In addition, a system-generated note is added to the lease to record the expiration.

See Defining Option Notifications.

Automated Workflow

Lease Transactions

Select this check box to enable workflow for lease transactions based on events setup on the workflow configuration. Tasklists will be created for the Lease Administrator or Portfolio manager based on the role which would enable them to review the lease.

Critical Dates

Select this checkbox to enable workflow for critical dates. The reviewer of the critical date notification will be directed to the Lease Abstract worksheet to review the cause of the notification and take appropriate action based on the upcoming event.

Transaction Queue Monitoring

Select this checkbox to enable workflow for transaction queue monitoring. A batch process will identify all the transactions in the queue which are beyond a threshold setup in BU level and send notifications to the Lease Administrator or Portfolio Manager about the pending approval.

TQM Outstanding Days

If Transaction Queue Monitoring is enabled, the outstanding days has to be entered.

Sales Amount Monitoring

Select this checkbox to enable workflow to create tasklists if the sales billing amount exceeds tolerance. The approver will be directed to an approval page from the tasklist. The transactions will only be sent to the Transaction Queue after approval.

Operating Expense Monitoring

Select this checkbox to enable workflow to create tasklists if the operating expense for a category exceeds tolerance. The approver should be directed to an approval page from the tasklist. The transactions should be sent to the Transaction Queue only after approval.

Defining Real Estate Management Business Unit Transaction Settings

Access the Lease Administration Business Unit - Transaction Settings page (Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Business Unit Definition, Transaction Settings).

Billing Options

Lead Time (Days)

Specify the billing default transaction lead time for automatically generated transactions for this real estate management business unit. The date specified determines the number of days before the billing date that you want the automatically generate process to occur. If the invoice due date is the end of the month and it takes your organization approximately 10 days to process the invoice, then set the lead time to 10. This setting is used to compensate for processing times needed for invoices to reach the tenant before the due date. Then, on each lease, the Transaction Generator picks up any recurring transactions based on the lease due date, less the lead time established here. Each recurring rent page includes an Anticipated Process Date field, which takes this setting into account.

Auto Approve

Select to automatically approve transactions in the transaction queue. The system sets the transactions to Pending status if nothing is selected. You need to approve each transaction before the transactions can be processed.

Billing Options - Straightline Accounting Routing Codes

Accrual	Enter the transaction routing code for the system to use as a default for straightline accruals in this real estate management business unit. The routing code for accruals determines the processing for receivables lease transactions in the general ledger.
Deferral	Enter the transaction routing code for the system to use as a default for straightline deferrals in this real estate management business unit. The routing code for deferrals determines the processing of receivables lease transactions in the general ledger.
Adjustment	Enter the transaction routing code for the system to use as a default for straightline adjustments in this real estate management business unit. The routing code for adjustments determines the processing of receivables lease transactions in the general ledger.

Accounts Payable Options

Lead Time (Days)

Specify the payables default transaction lead time for auto-generated transactions for this real estate management business unit. The date specified determines the number of days prior to the due date that you want the auto-generate process to occur. If the due date is the end of the month and it takes your organization approximately 10 days to process (from vouchering to mailing), then set the lead time to 10. This setting is used to compensate for processing times needed to ensure that a payment reaches the landlord by the due date. Then, on each lease, the Transaction Generator picks up any recurring transactions based on the lease due date, less the lead time established here. Each recurring rent page includes an Anticipated Process Datefield, which takes this setting into account.

Auto Approve

Accounts Payable Options - Straightline Accounting Routing Codes

Accrual	Enter the transaction routing code for the system to use as a default for straightline accruals in this real estate management business unit. The routing code for accruals determines the processing for payables lease transactions in the general ledger.
Deferral	Enter the transaction routing code for the system to use as a default for straightline deferrals in this real estate management business unit. The routing code for deferrals determines the processing of payables lease transactions in the general ledger.
Adjustment	Enter the transaction routing code for the system to use as a default for straightline adjustments in this real estate management business unit. The routing code for adjustments determines the processing of payables lease transactions in the general ledger.

Item Routing Codes

Base Rent

Select the routing code for base rent transactions for this real estate management business unit. All rent transactions generated for this real estate management business unit use this routing code to generate entries that are interfaced into the general ledger.

See Understanding Transaction Routing Codes.

Security Deposit

Issue	Enter the routing code to be used for standard security deposit transactions.
Deduction	Select the routing code for security deposit deductions. Security deposit deduction transactions that you create use this default to generate entries that are interfaced into the general ledger. Deductions are used only in the security deposit refund process. Any deductions for damages also use this code.
Interest	Select the routing code for security deposit interest. Security deposit transactions that you create use this routing code to generate entries that are interfaced into the general ledger. Interest is used only in the security deposit refund process. Any interest earned on security deposits held use this code.
Refund	Select the routing code for security deposit refunds. Security deposit refund transactions that you create use this default to determine processing in the general ledger. Refund is used only in the security deposit refund process to reverse the initial issue amount.

Group Routing Codes

The Real Estate Management application uses transaction groups to link certain classes of transaction. The transaction groups—Operating Expense, Percentage Rent, Manual Fees and Miscellaneous Rent are collections of transaction categories. The Group Routing Codes field enables you to define the default routing code for each transaction group if you elect not to specify a routing code at the transaction category level. For example, let's say that you have defined an Operating Expense category called Garbage Removal and you choose not to provide a specific routing code for Garbage Removal. When an Operating Expense transaction is generated for Garbage Removal, the transaction generator attempts to locate the category's routing code. Since the routing code is not specified at the category level, the transaction generator looks for a routing code specified at the transaction group level, and the system picks up the default routing code for Operating Expenses.

Note. Transaction Group default routing codes are all required fields. A transaction cannot be processed unless a routing code exists and the transaction group is the top level of the defaulting chain.

Operating Expense	Select the default routing code for all operating expenses. The system provides this routing code by default when a specific routing code is not defined for an operating expense.
Percent Rent	Select the default routing code for all percent rent transactions. The system provides this routing code by default when a specific percent rent routing code is not defined for percent rent transactions.
Miscellaneous Rent	Select the default routing code for all miscellaneous rent. The system provides this routing code by default when a specific routing code is not defined for miscellaneous rent transactions.
Manual Fees	Select the default routing code for all manual fees. The system provides this routing code by default when a specific routing code is not defined for manual fee transactions.

Billing Defaults

Bill Type

Select a default bill type for leases created under this real estate management business unit. The bill type represents a category of activity being billed.

This is prompted from Billing Setup. This is not a required field in RE BU setup. If this is left blank, this will be defaulted from the Contracts BU setup. If this is null for that BU in Contracts also this will raise an error on Lease Activation.

Bill Source

Select the default billing source. The billing source is used to identify where the billing activity came from and to then associate default billing information with that billing activity.

Bill By

Select a default bill by for leases created under this real estate management business unit. The Bill By field enables you to group bill lines on invoices.

This is prompted from Billing Setup. This is not a required field in RE BU setup. This can be blank in the Contracts side also.

Defining Real Estate Management Business Unit Options and Critical Date Settings

Access the Lease Administration Business Unit Definition - Options and Critical Dates page (Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Business Unit Definition, Options and Critical Dates)

The options setup here will be defaulted onto the lease. Users can add additional lease-level critical dates to the lease that are in addition to the business unit defined defaults.

Establishing Real Estate Management Accounting Rules for Lease Administration

This section discusses how to define real estate management accounting rules for lease administration.

Page Used to Establish Accounting Rules

Page Name	Definition Name	Navigation	Usage
Accounting Rules for Lease Administration	CA_ACCT_RULES	Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Accounting Rules	Define accounting rules for transaction destinations and transaction groups for lease transactions.

Defining Real Estate Management Accounting Rules for Lease Administration

Access the Accounting Rules for Lease Administration page (Set Up Financials/Supply Chain, Business Unit Related, Real Estate Management, LA Accounting Rules).

Note. When you add a new accounting rule for a lease administration business unit, you should use the same general ledger business unit that you selected on the Lease Administration Business Unit Definition - General page in the General Ledger field for that lease administration business unit.

When you define the real estate management accounting rules, you must keep in mind that the real estate business unit can only be mapped to a single general ledger business unit. PeopleSoft Real Estate Management does not support interunit accounting, therefore, only the accounting rules defined for the real estate business unit and general ledger business unit combination can be used to generate accounting entries. For example, the real estate business unit of US001 mapped to general ledger business unit US001 uses only those accounting rules that are defined by this business unit combination. Accounting rules defined for any other business unit combination cannot be used for processing.

Transaction Destination	Enter the destination where the transaction is sent. The value that you enter determines the accounting rules for an expense or revenue transaction. Values are: AP (PeopleSoft Payables): If the transaction destination is AP, then PeopleSoft Payables uses the accounting rule that you define. When the transaction goes to PeopleSoft Payables, the accounting rule specifies the expense debit side of the accounting entry. BI (PeopleSoft Billing): If the transaction destination is BI, then PeopleSoft Billing uses the accounting rule that you define. When the transaction goes to PeopleSoft Billing, the accounting rule specifies the revenue credit side of the accounting entry that the transaction needs to offset the PeopleSoft Receivables side of the entry that they create. GL (PeopleSoft General Ledger): If the transaction destination is GL, then PeopleSoft General Ledger uses the accounting rule that you define. When the transaction goes to PeopleSoft General Ledger, the accounting rule specifies the expense debit side of the accounting entry.
Transaction Group	Select the transaction group to define the type of transactions being sent to create the proper journal entries. Possible values for this field are Base Rent, Security Deposit, Straightline Accounting, Operating Expense, Miscellaneous Expense, Manual Fee and Percent Rent.
Transaction Routing Code	Select the transaction routing code. You can define unique accounting rules by specifying the transaction routing code for a specific transaction group.
Copy Account Entries To	Click to copy accounting rules to create a new accounting rule.

Accounting Entries

Use the fields in this group box to define your accounting entries for your lease transactions. By using the % (wildcard), the system accepts the default entries for that field.

Debit/Credit	Displays whether the accounting entry is a debit or credit. This field corresponds with the value that you selected in the Account Type field.
Account Type	Select the account type for this accounting entry.
Account	Enter the account number for the account type.