PeopleSoft Real Estate Management 9.1 PeopleBook

Setting Up Operating Expenses

This chapter provides an overview of operating expenses, lists prerequisites, and discusses how to:

Establish operating expenses for a lease.
Perform operating expense audits for payables leases.
Reconcile operating expenses for receivables leases.

Understanding Operating Expenses

The cost of maintaining a property or a building, commonly referred to as Common Area Maintenance (CAM) or operating expenses, is typically considered a shared expense between a landlord and a tenant. These expenses can include utilities, taxes, insurance, maintenance, cleaning, advertising, and promotions. The actual expenses are normally based on the percentage of the space that is occupied (pro rata share) and is detailed in the actual lease. The PeopleSoft Real Estate Management system enables you to set up recurring invoices or payments for estimated operating expense charges and also perform end-of-year audits and reconciliation for those shared expenses.

Typically, on an annual basis, the landlord breaks down all estimated operating expenses for the year and passes those charges through to the tenants on a monthly basis based on how much of the building that they are occupying. Since the monthly amount that is invoiced or paid is based on an estimate, the system tracks all invoices and payments that are made. At the end of the year, the landlord reconciles the estimated expenses with actual costs. A credit is issued to the tenant for overpayment or an invoice for underpayment. After the reconciliation is complete, the landlord uses that data to better estimate the upcoming year's expenses and provide a new budget and estimated bill amount. Tenants can hold CAM audits in situations where they believe that the costs are inaccurate or if they just want to verify the estimates against actuals.

Understanding Catch Up Payments

Catch up payments are the adjustment payment for the first months of the new year. Catch up payments are the difference between the estimated payment amount paid to date in a new lease year (which has been paid at the prior year estimated payment amount) and the amount due per the new estimated payment amount. It may be possible for this to be a negative number, which would be treated as a credit. During the revision of the annual expenses through an amendment, the catch up amount should be recorded at the category level. This catch up payment will be added to the first transaction that will be sent to the transaction queue after the amendment is activated.

Prerequisites

Before you can set up operating expenses, you must:

Set up the routing code.
Set up the operating expense categories.
Associate the routing code with the operating expense categories.
Add accounting rules for those operating expense categories/routing codes.
Define the Prorata Basis.

See Understanding Operating Expense Categories.

Establishing Operating Expenses for a Lease

This section discusses how to:

Establish operating expense details.
Establish prorata share details.
Enter cap/minimum details.
Approve operating expenses.

Pages Used to Establish Operating Expenses for a Lease

Page Name	Definition Name	Navigation	Usage
Financial Terms - Operating Expenses Details page	RE_LS_TRM_SEC	Real Estate Management, Lease Administration, Payables Leases, Create New Lease, Financial Terms Click the Add Operating Expense button. Real Estate Management, Lease Administration, Receivables Leases, Create New Lease, Financial Terms Click the Add Operating Expense button. Real Estate Management, Lease Administration, Payables Leases, Maintain Lease, Financial Terms Click the Add Operating Expense button. Real Estate Management, Receivables Leases, Maintain Lease, Financial Terms Click the Add Operating Expense button.	Define an operating expense for the lease. When you establish your operating expense details, you can set up categories and minimum and maximum amounts for that operating expense.
Accounting Distributions	RE_LS_TRM_DST_SEC	Click the Accounting Distributions link on the Financial Terms - Operating Expenses Details page.	Override the accounting distributions defined at the business unit level.
Prorata Share Basis	RE_LS_PRTA_SEC	Real Estate Management, Lease Administration, Payables Leases, Maintain Lease, Financial Terms Click the Add Operating Expense button. Click the Prorata Detailslink.	Use this page to enter prorata basis information for this operating expense. Note. This link is available only if you select Gross Leasable Area, Occupied area, or Occupied Area with Floor as the Prorata Share Basis.
Caps/Minimum Details	RE_LS_OPX_CAP_SEC	Real Estate Management, Lease Administration, Payables Leases, Maintain Lease, Financial Terms Click the Add Operating Expense button. Click the Caps Detailslink.	Use this page to enter caps detail information for this operating expense. Note. This link is available only if you select Apply as the CAP/MIN.
Operating Expense Approval	RE_LS_OPX_APP	Select a task item from your worklist.	Approve operating expenses that exceed tolerances.

Establishing Operating Expense Details

Access the Financial Terms - Operating Expenses Details page (click the Add Operating Expense button on the Financial Terms page).

Start Date

Enter the begin date for the operating expense. The start date must occur on or after the lease start date. The system uses the lease start date as the default.

End Date

Enter the end date for the operating expense. The end date should occur on or before the lease termination date. The system uses the lease end date as the default.

Payee

Enter the entity who receives the operating expense payments. The default value is the landlord from the lease. This field appears only for operating expenses that are associated with payables leases.

Ship To

Enter the vendor ship to location. This location will be used for VAT and SUT calculations by PeopleSoft Payables Voucher Build application. Applicable only for payables leases. This is not a required field and if this is left blank, Voucher Build will populate the default ship to location for the vendor.

Payor

Enter the entity who is responsible to make the operating expense payments. The default value is the tenant from the lease. This field appears only for operating expenses that are associated with receivables leases.

Accounting Distribution

Click this link to access the Accounting Distribution page and to override the operating expense details accounting distribution rules defined at the business unit level.

Add Expense Line

Click to add a new row to the Operating Expense Categories grid.

Operating Expense Details

Prorata Share Method	This is the basis on which the tenant's share of expenses is calculated. Generally, it represents the ratio of the area of the tenant's premises to that of the building or property as a whole, or an appropriate part thereof. Select either: Fixed Percentage: Select this value if the tenant's prorata basis is stated in the lease as a percentage. Gross Leasable Area: Select this value if the tenant's prorata basis is calculated as a ratio of the tenant area over the total area, whether the tenant occupied the entire area or not. None Occupied Area: Select this value if the tenant's prorata basis is calculated as the ratio of the tenant area over the occupied area. Occupied Area with Floor: Select this value if the tenant's prorata basis is calculated as the ratio of the tenant area over the greater of the occupied area or the floor area. The floor is usually expressed in the lease as an occupancy percentage, which is multiplied times the gross leasable area and then compared to the occupied area.
Prorata Details	Click this link to access the Prorate Share Details - Basis page. This link is only available if you select Gross Leasable Area, Occupied Area,or Occupied Area with Floor as the Prorata Share Method.
Admin Fee Method (administration fee method)	Choose either: Accrual Method: The administration fee will be charged as a percentage of landlord's overall expenses. Amount: The administration fee will be charged as fixed amount for an expense category. Cash Method: The administration fee will be charged as a percentage of expenses paid by tenant. None
Admin Fee Percentage (administration fee percentage)	Enter the admin fee percentage
Exclude Base Year	Select this check box to exclude a base year. The base year fields are informational only.
Base Year	Enter the year to be used as the base year. If you select Exclude Base Year, then you must enter a base year.
Base Year Amount	Enter the amount to be used for the base year. If you select Exclude Base Year, then you must enter a base year amount.
Base Year Gross Up Percent	Enter the base year gross up percentage. If you select Exclude Base Year, then you must enter a base year gross up percent.
Cap/Min	Alerts:If this option is selected, then the Caps/Min calculation is not applied. The maximum amount defined at the category level will be used to validate the actual amount and an alert will be displayed in the worksheet against the category if the actual amount is greater than the maximum for the category. Apply: Select this value to apply caps and minimums to this operating expense. None
Caps Detail	Click this link to access the Caps/Minimum Details page. This link appears only if Apply is selected as the Cap/Min value.
Exp. Gross Up(expense gross up)	Select this check box to enable expense gross up.
Gross Up Percent	Enter the gross up percentage to be applied to this operating expense.
Gross Up Method	Select either: Method A: If the actual occupancy is more than gross up percentage specified on the lease, then the expenses will be grossed up to 100 percent occupancy level. Method B: If the actual occupancy is more than the gross up percentage specified on the lease, then the expenses will not be grossed up.

Expense Categories

Operating Expense	Enter or select the operating expense category for recoverable shared expenses. You can select from only active operating expense categories. See Defining Operating Expense Categories.
Estimated Amount	Enter the estimated amount for the operating expense. Use the estimated amount for monthly recurring invoices or payments.
Min Amount (minimum amount)	Enter the minimum amount for the operating expense. Note. This field is for information use only.
Max Amount (maximum amount)	Enter the maximum amount to charge for the operating expense. Use this field to calculate audit alerts during the audit and reconciliation processes.
Administration Fee	Enter the administration fee. The system adds this amount to the operating expense charges after final calculations of all operating expenses for the lease.
Straightline	Select to apply straightline calculations to the operating expense. Note. If the rent amount or recurring expense amount for the operating expense is not evenly billed across periods, then those amounts must be reported in the general ledger on a straightline basis (an even distribution). See Understanding Straightline Accounting.
Calculate	Click the button to calculate the recurring monthly operating expenses. Note. This button is only available when the lease or amendment is in pending status.
Total Estimated Payment	Displays the total estimated payment amount for the operating expenses.
Schedule	Select a value from the prompt table to specify how often to invoice or pay the operating expenses. Use this field to determine the frequency of the invoice or payment. The values from which you select come from the Schedule component. Note. If the value you need is not available, to the Schedule component to add additional values. See Defining Common Journal Definitions.
Frequency	Displays the frequency that is associated with the schedule that you selected.
Anticipated Process Date	Displays the current anticipated processing date or the next date on which a transaction is available to be approved and sent to PeopleSoft Payables or PeopleSoft Billing. This field appears only after lease activation. Note. You must run the Transaction Generator to get the scheduled transactions into the transaction queue.
Terms Calendar	Enter the terms calendar, which determines the start date and end date of billing periods for the operating expense. The calendar ID from the business unit definition appears by default. You can override this value, but the frequency of the schedule and terms calendar must be the same. This is a required field.

Details

Caps	Select this check box is caps apply to this expense.
Fee	Select this check box if fees apply to this expense.
Gross Up	Select this check box if grossing up applies to this expense.
Anchor Contribution	Enter any anchor contribution made by the tenant.
Basis	Select a basis for this operating expense.
Catch Up	Catch up payments are the adjustment payment for the first months of the new year. The difference between the estimated payment amount paid to date in a new lease year (which has been paid at the prior year estimated payment amount) and the amount due per the new estimated payment amount This catch up payment will be added to the first transaction that will be sent to the transaction queue after the amendment is activated.
Accounting Distribution	Click this link to access the Accounting Distribution page and override the operating expense category accounting rules defined at the business unit level.

Overriding Accounting Distributions

Access the Accounting Distributions page (click the Accounting Distributions link on the Operating Expense Details page).

The fields on this page differ depending upon the distribution selected. When you select a value other than None, the ChartField values become available for edit.

Distribute By	Select either: Percentage: Select this value to change the accounting distribution by percentage for each financial term. Area: Select this value to change the accounting distribution by area for each financial term. The rent will be distributed based on the ratio of the areas. None: Select this option to use the accounting distribution set up at the business unit level.
Add Distribution	This button appears if you select Percentageor Area for the distribute by value. Click this button to insert a new distribution row.
Delete Distribution	This button appears if you select Percentage or Area for the distribute by value. Select a row and click this button to delete it from this page.
Select	This checkbox appears if you select Percentage or Area for the distribute by value. This checkbox is used to delete distribution rows. Select this checkbox and click the Delete Distribution button to delete the rows.
Percentage	This field appears if you select Percentagefor the distribute by value. Enter a percentage amount for this distribution line. Percentage amounts must equal 100% to be valid.
Area	This field appears if you select Areafor the distribute by value. Enter the area for this distribution line. All lines must add up to the total rentable area for the lease to be valid.
Valid	Used to indicate a valid combination of chartfields. When activating the lease, edit checking will be provided and the checkbox will be selected for each row representing a valid combination of chartfields. A lease cannot be activated until every accounting distribution is marked as valid.

Establishing Prorata Share Details

Access the Prorata Share Details - Basis page (click the Prorata Details link on the Operating Expense Details page)

The fields on this page vary depend on which prorata share basis is selected on the Operating Expense page.

Prorata Share Method	Displays the prorata share method selected on the Operating Expense Details page.
Unit of Measure	Displays the unit of measure.
Agreement No(agreement number)	Displays the agreement number for the prorata share details.
Prorata Basis	Enter a prorata basis.
Tenant Area	Enter the tenant's area.
Total Area	Enter the total area to be considered for this prorata basis. The total area of the property selected on the lease will be defaulted here. The user can override this value here.
Floor Percentage	Enter the percentage of floor to be considered for this prorata basis. This field is only available if you select Occupied Area With Floor as the Prorata Basis option on the Operating Expense Details page.
Description	Enter a description for the prorata share details.

Entering Cap/Minimum Details

Access the Cap/Minimum Details page (click the Caps Detail link on the Operating Expense Details page).

Caps Applied To

Select whether the caps are applied to Tenant Share or Landlord Expense.

Caps Basis

Select either:

Prior Year Restricted: The cap calculation is applied to the prior period landlord or tenant share after caps are applied.

Prior Year Actual: The cap calculation is applied to the prior period landlord or tenant share before caps are applied.

Cap Applied

Select either:

Before Fee: Caps should be applied on the landlord or tenant share before administration fee is applied.

After Fee: Caps should be applied on the landlord or tenant share after administration fee is applied.

Subsequent Year Cap

Method	Percentage: Caps will be calculated as a percentage increase over the prior year expense. Indexed: Caps will be linked to an index. Least of Percent or Index: For this method of calculating minimum and maximum, define a percentage and the system will calculate the indexed value and the least of the two will be considered for the final calculation. the indexed value at the end date of the current audit period will be compared with the last date of the baseline period.
Percentage	Enter the percentage to be used in calculation.
Compare To	Select a comparison value: Base Last
Index Name	For Indexed or Least of Percent or Index, specify the index value to be used.

Subsequent Year Minimum

Method	Percentage: Caps will be calculated as a percentage increase over the prior year expense. Indexed: Caps will be linked to an index. Least of Percent or Index: For this method of calculating minimum and maximum, define a percentage and the system will calculate the indexed value and the least of the two will be considered for the final calculation. indexed value on the start date of the current audit period will be compared with the first date of the baseline period
Percentage	Enter the percentage to be used in calculation.
Compare To	Select a comparison value: Base Last
Index Name	For Indexed or Least of Percent or Index, specify the index value to be used.

Approving Operating Expenses

Access the Operating Expense Approval page (Click a task in your worklist.)

If operating expenses are outside tolerance limit, the system will:

On Processing, set the operating expense worksheet to Pending Approval.
Create tasklist for the approver
Route the approver from the tasklist to the approval page
If the transaction is approved, send the transactions to the TQM and change the status of the Worksheet to Processed.
If the transaction is denied, change the status of the worksheet to Pending so that the worksheet can be edited and the whole process can be repeated.

The Approval map displays the path and status of approvals. Ad-Hoc approvers can be added by clicking on the Add button.

Performing Operating Expense Audits for a Payables Lease

This section provides an overview of operating expense audits and discusses how to:

Perform operating expense audits.
Compare operating expenses with the previous audit.

Understanding Operating Expense Audits

The PeopleSoft Real Estate Management system provides you with the ability to reconcile annual operating expenses or CAM against your estimated payments. When the landlord sends the annual CAM reconciliation statement with any invoice or credit against the estimated payments that you have made, you can compare the information against your records of estimated payments, as well as the CAM charges from the previous year. If the charges significantly increase or decrease or the data that is provided by the landlord is insufficient, you can initiate a formal CAM audit.

You can use the Audit Operating Expenses - Operating Expense Audit page to enter the values from the reconciliation statement for each expense category. The system automatically calculates the amounts that you paid to the payee, which includes all of the recurring amounts and the audit adjustment amounts. To calculate the paid amount, the system uses only processed transactions from the transaction queue. You can enter manual adjustments the final total for each expense category. The system compares the data that you entered against the data that is stored in the lease and flags any value that exceeds a certain tolerance threshold.

Note. You set up the tolerance threshold at implementation in the real estate management business unit.

After you have reviewed and compared the data in the worksheet and are satisfied with the final calculated numbers, you can issue a payment for any underpayments. If an overpayment occurs, you can create a negative payables line and apply it to any future payments, or, the landlord can issue a refund check or credit.

Prerequisites

Before you can perform an operating expense audit, the lease that you are auditing must be in active, expired, or holdover state. You must also enter operating expenses terms against the lease.

Pages Used to Audit Operating Expenses

Page Name	Definition Name	Navigation	Usage
Audit Operating Expenses - Operating Expense Audit	RE_OPEXAUDIT	Real Estate Management, Lease Administration, Payables Lease, Audit Operating Expenses	Create an operating expense worksheet to compare estimated operating expense payments against actual expenses.
Accounting Distributions	RE_LS_OPEX_CTG	Click the Accounting Distributions link on the Audit Operating Expenses page.	Enter accounting distributions for the audit.
Audit Operating Expenses - Compare Operating Expenses with Prior Audit	RE_OPEXAUDIT_CMP	Real Estate Management, Lease Administration, Payables Lease, Audit Operating Expenses Click the Compare Previous Audit link.	Displays the current audit data and prior audit data, if available. You can use this comparison data to ensure continuity in operating expense charges from year to year.

Performing Operating Expense Audits

Access the Audit Operating Expenses - Operating Expense Audit page (Real Estate Management, Payables Lease, Audit Operating Expenses).

Business Unit

Displays the lease administration business unit selected on the search page.

Lease Number

Displays the lease number selected on the search page.

Currency

Displays the currency of the lease.

Lease Name

Displays the lease name.

Agreement No (agreement number)

Displays the agreement number for the lease operating expense.

Audit Number

Displays the sequential number that is assigned to this audit.

Status

Displays the audit status.

Landlord

Displays the landlord for this lease.

From Date

Enter the date on which you want the audit period to begin. This date must occur after the lease start date and cannot be later than one day after the To Datefrom the previous audit. The system sets the From Date to one day later than the previous audit by default. For first audit period the system uses the lease commencement date by default.

To Date

Enter the date on which you want the audit period to end. This date must occur after the from date and cannot be later than the current date.

UOM (unit of measure)

Displays the unit of measure of this lease.

Revision

Displays the revision number for this audit.

Accounting Distributions

Select this link to access the Accounting Distributions page.

Update Audit

Click to update this audit. The system compares the actual charges in the current audit with the charges for the operating expense categories in the previous audit and creates and invoice for the balance amount. You can update an audit only after all of the audit transactions have been processed. This field appears only for processed audits.

Prorata Basis

Prorata details group box will not be available for the user if:

Fixed percentage method is used for sharing expenses.
Prorata share is not used to calculate tenant's share.

Prorata Share Method	Displays the prorata share method for this operating expense.
Gross Up Percentage	Displays the gross up percentage for this operating expense.
Gross Up Method	Displays the gross up percentage for this operating expense.
Calculate Prorata Basis	Click this button to calculate the prorata basis.
Prorata Basis	Displays the prorata basis selected for this operating expense.
Tenant Area	Enter the area this tenant occupies.
Rentable Area	Enter the total rental area available.
Occupied Area	Enter the total area occupied.
Occupancy Percentage	Displays the percentage of area this tenant occupies.
Prorata Share	Displays the percentage of the total area that you are occupying. The system displays the value from the lease. The field is informational only. The system does not use the field for any calculations.

Expense Details

Admin Fee Percentage Administration Fee Percentage	Displays the administration fee percentage.
Base Year	Displays the base year entered on the lease.
Base Year Adjustment	Displays the base year adjustment entered on the lease.
Add Category	Click this button to create a new operating expense category for the lease. This button appears only for pending audits.
Base Year Gross Up	Displays the base year gross up entered on the lease.
Category	Select the expense category. Operating expense categories that are in a processed state will be retrieved from the Transaction Queue for the given lease and payee.
Actual Amount	Enter the actual amount for this expense category.
Previous Period	Displays the amount for the previous period if available.
Change	Displays the change in amounts from the previous period.
Caps	Select this check box to indicate if caps are applied to this category.
Fee	Select this check box to indicate if administration fees apply to this category.
Gross Up	Select this check box to indicate if gross up applies to this category.

Overall Expense

Grossed Up Expense	Enter the grossed up expense for this expense category.
Admin Fee (administration fee)	Enter any administration fees applied to this category.
Anchor Contribution	The anchor contribution defaults from the lease, the user can override the value here.
Adjusted Expense	Enter the adjusted expense for this category.
Minimum	Enter the minimum for this category.
Maximum	Enter the maximum for this category.
Sharable Expense	The system calculates this value. This is the expense which needs to be shared based on the prorata share of the tenant.

Tenant Share

Prorata Share	Displays the prorata share calculated using the values entered.
Occupancy Pct (occupancy percentage)	Enter the occupancy percentage for this category. The default is 100 percent.
Tenant Share	Displays the tenant share calculated based on the sharable expense, prorata share, and the occupancy percentage entered.
Paid Amount	Displays the amount paid to the landlord.
Amount Due	Displays the amount due to the landlord.

Operating Expense Categories

The system automatically populates the Operating Expense Categories grid with the operating expense categories that are associated with the lease and payee on which you are performing the audit.

Operating Expense Categories in the processed state will be retrieved from the Transaction Queue for the given Lease and Payee.

Calculate	Click the button to calculate the total lines that were entered. When you click the button, the system calculates the difference between the paid amount and the actual amounts and displays the totals and the adjustments.
Total Paid To Landlord	Displays the total operating expenses that were paid to the landlord. The system adds all of the amounts in the Paid Amount column.
Total Adjusted Actual Amount	Displays the total amount of the operating expenses that should have been paid to the landlord or payee. The system adds all of the amounts in the Actual Amount column.
Total Manual Adjustment	Displays the total amount of the manual adjustments. The system adds all of the amounts in the Adjust Amount column.
Total Administration Fee	Displays the total administration fee. The system adds all of the amounts in the Admin Fee column.
Total Amount Due	Displays the amount that you owe the landlord or payee. The system uses this formula to calculate the amount: Amount Owed = Total Adjusted Actual Amount + Total Manual Adjustment + Total Administration Fee − Total Paid To Landlord.
Create Payment	Click to create a payment for underpayment of the operating expenses for the year. When you click this button, the system sends the transaction to the transaction queue for payment processing.
Compare Previous Audit	Click to select the previous audit for comparison, if it exists. The system bases the comparison on the audit end dates. The previous audit is the one with an audit end date less the current audit end dates. The system retrieves the two audits and displays them side-by-side. The system flags category differences from year-to-year and identifies massive increases or charges that are above the maximum that is allowed. If the system cannot find a category match, it separates those categories that are not available for comparison.

Comparing Operating Expenses with the Previous Audit

Access the Audit Operating Expenses - Compare Operating Expenses with Previous Audit page (click the Compare Previous Audit link on the Audit Operating Expenses page).

This page enables to you compare and audit operating expenses against previous audit data, if it exists. The system retrieves the two audits and displays them side-by-side. The system flags category differences from year-to-year and identifies massive increases or charges that are above the maximum that is allowed. If the system cannot find a category match, it separates those categories that are not available for comparison.

Current Period	Displays the date range for this audit period.
Prior Period	Displays the date range for the prior audit period that you are comparing.

Common Operating Expense Audits for Current and Prior Audits

Current Actual	Displays the current actual amount that you entered based on the reconciliation statement.
Prior Actual	Displays the previous audit actual amount.
Difference % (difference percentage)	Displays the percentage difference between the current actual amount and the prior actual amount. ((Current Actual - Prior Actual) ÷ Prior Actual).
Diff Amt (difference amount)	Displays the difference amount. (Current Actual - Prior Actual).
Current Cost/Sq Unit (current cost per square unit)	Displays the current cost per square unit. (Current Cost ÷ Sq Unit = Adjusted Actual Amount ÷ Total Rentable Area).
Prior Cost/Sq Unit (prior cost per square unit)	Displays the prior cost per square unit. (Prior Cost/Sq Unit = Prior Actual Amount ÷ Prior Total Rentable Area).

Unmatched Categories

When the system cannot match up one or more categories from a previous audit with the categories from the current audit, the system displays the discrepancies in the Unmatched Categories grid. This occurs when you create a new category or an existing category from a previous audit does not exist, or if you change the category in the middle of the year. As a result, the system is unable to provide any comparisons for these categories because there is no exact match.

Calculated Total for Current and Prior Audits

Current Actual	Displays the total amount that you paid to the payee. This amount might differ from the reconciliation statement that is provided by the landlord. The current actual amount paid is based on an estimate that is provided to you at the beginning of the lease.
Prior Actual	Displays the total amount that you paid to the payee in the prior period.
Diff Amt (difference amount)	Displays the difference between the prior actual amount and the current actual amount.
Current Payor Actuals	Displays the current total amount that is paid by the payor.
Payors Actuals Difference	Displays the total amount that the payor paid in the prior audit.
Current Rentable Area	Displays the current total rentable area in the lease.
Prior Rentable Area	Displays the total rentable area in the prior audit.
Rentable Area Difference	Displays the difference between the current and prior rentable area in the lease.
Current Cost Per Sq Unit (current cost per square unit)	Displays the total current cost per square unit.
Prior Cost/SQ Unit (prior cost per square unit)	Displays the total prior cost per square unit.
Cost/SQ Unit Difference (cost per square unit difference)	Displays the difference of the total cost per square unit between the current period and the prior periods.

Reconciling Operating Expenses for Receivables Leases

This section provides an overview of operating expense reconciliation and discusses how to:

Reconcile operating expenses
Compare operating expense reconciliations

Understanding Operating Expense Reconciliation

PeopleSoft Real Estate Management enables you to reconcile the difference in the original estimated operating expense and the actual operating expenses for each tenant or payor for a time period. The system calculates the amount of estimated operating expenses for the transactions that the system processed during a time period that you specify. You can enter the actual expenses that you incurred based on these criteria:

Operating expense category: Summarize your charges by operating expense category.
Tenant: Specify the tenant or payor.
Time period: Determine reconciliation from and to dates.

Use the Reconcile Operating Expenses - Operating Expense Statement page to enter these amounts and compare them with the amounts that the payor paid. You can manually adjust the amount for each operating expense category. Click the Create Invoice button on the Operating Expense Statement page to access the Billing Review page. In the case of an overpayment, you can issue a credit to the tenant that could be applied against future rent payments. In the case of an underpayment, you can issue an invoice for the remaining sum. Enter the billing amount as negative to generate a payment credit or positive to create an invoice.

You can compare this reconciliation with the previous reconciliation to identify any time gaps or large amount differences in the operating expenses.

Pages Used to Reconcile Operating Expenses

Page Name	Definition Name	Navigation	Usage
Reconcile Operating Expenses - Operating Expense Statement	RE_OPEXAUDIT	Real Estate Management, Lease Administration, Receivables Lease, Reconcile Operating Expenses	Compare operating expenses to the operating expense statement to reconcile paid expenses against actuals.
Reconcile Operating Expenses - Compare Operating Expenses with Prior Statement	RE_OPEXAUDIT_CMP	Real Estate Management, Lease Administration, Receivables Lease, Reconcile Operating Expenses Click the Compare Previous Audit link.	Displays the current reconciliation data and prior reconciliation data. You can use this comparison data to ensure continuity in operating expense charges.

Reconciling Operating Expenses

Access the Reconcile Operating Expenses - Operating Expense Statement page (Real Estate Management, Lease Administration, Receivables Lease, Reconcile Operating Expenses).

Note. The fields on this page function the same as the fields on the Audit Operating Expenses - Operating Expense Audit page.

See Performing Operating Expense Audits.

Comparing Operating Expense Reconciliations

Access the Reconcile Operating Expenses - Compare Operating Expenses with Prior Statement page (click the Compare Previous Audit link on the Reconcile Operating Expenses page).

The fields on this page function in the same way as the fields on the Audit Operating Expenses - Compare Operating Expense with Prior Audit page.

See Comparing Operating Expenses with the Previous Audit.

Start Date	Enter the begin date for the operating expense. The start date must occur on or after the lease start date. The system uses the lease start date as the default.
End Date	Enter the end date for the operating expense. The end date should occur on or before the lease termination date. The system uses the lease end date as the default.
Payee	Enter the entity who receives the operating expense payments. The default value is the landlord from the lease. This field appears only for operating expenses that are associated with payables leases.
Ship To	Enter the vendor ship to location. This location will be used for VAT and SUT calculations by PeopleSoft Payables Voucher Build application. Applicable only for payables leases. This is not a required field and if this is left blank, Voucher Build will populate the default ship to location for the vendor.
Payor	Enter the entity who is responsible to make the operating expense payments. The default value is the tenant from the lease. This field appears only for operating expenses that are associated with receivables leases.
Accounting Distribution	Click this link to access the Accounting Distribution page and to override the operating expense details accounting distribution rules defined at the business unit level.
Add Expense Line	Click to add a new row to the Operating Expense Categories grid.

Business Unit	Displays the lease administration business unit selected on the search page.
Lease Number	Displays the lease number selected on the search page.
Currency	Displays the currency of the lease.
Lease Name	Displays the lease name.
Agreement No (agreement number)	Displays the agreement number for the lease operating expense.
Audit Number	Displays the sequential number that is assigned to this audit.
Status	Displays the audit status.
Landlord	Displays the landlord for this lease.
From Date	Enter the date on which you want the audit period to begin. This date must occur after the lease start date and cannot be later than one day after the To Datefrom the previous audit. The system sets the From Date to one day later than the previous audit by default. For first audit period the system uses the lease commencement date by default.
To Date	Enter the date on which you want the audit period to end. This date must occur after the from date and cannot be later than the current date.
UOM (unit of measure)	Displays the unit of measure of this lease.
Revision	Displays the revision number for this audit.
Accounting Distributions	Select this link to access the Accounting Distributions page.
Update Audit	Click to update this audit. The system compares the actual charges in the current audit with the charges for the operating expense categories in the previous audit and creates and invoice for the balance amount. You can update an audit only after all of the audit transactions have been processed. This field appears only for processed audits.