Setting Up and Calculating Percent Rent

This chapter provides an overview of percent rent terms, lists prerequisites, and discusses how to:

• Set up percent rent terms.

• Report sales and calculate percent rent.

Understanding Percent Rent Terms

Percent rent enables you to negotiate a lower monthly base rent in exchange for a portion of your sales once the threshold is met. This lease method is appealing because you receive a lower monthly liability in months of lower sales. As the sales amount reaches a specified threshold (breakpoint), the percentage changes, thus altering the amount of the final rent amount. For a breakpoint, the rent can be a fixed amount, a percentage of sales, or a combination of fixed amount and percentage.

When multiple breakpoints are established, the system determines which breakpoint has been reached and adds its incremental percentage over and above the other breakpoints. For example, let's say the breakpoints are as follows:

• 0 to 1,000 (5%)

• 1,000.01 to 4,999.99 (4%)

• 5,000 to 99,999,999,999.99 (3% + 1,000 USD)

If the sales amount is 1,500 USD, then the system takes the maximum of the prior breakpoint multiplied by that breakpoint percentage (or amount, or both depending on lease terms), adds the incremental amount over that breakpoint maximum, multiplied by the new breakpoint percentage.

In this example, the calculation is as follows: 1,000 × 5% + (1,500 − 1,000) × 4% = 70.

Using the previous example, if a lease had three breakpoints in percent rent setup, and the sales amount reached the third level (10,000), then the calculation is as follows: 1,000 × 5% + (4,999.99-1,000) × 4% + (10,000 − 4,999.99) × 3% +1,000 = 1360.

These tables provide additional examples of the percent rent category based calculation methodology:

Percent Rent Setup Data:

Sales Breakpoints

Sales Data

You define the percentage breakpoints for the percent rent tier structure before activating the lease; after the lease is activated, you must create an amendment to perform any changes to the structure. You include percent rent terms on the lease and enter them into the system prior to lease activation. You set the various sales breakpoints (or tiers) for the lease under different sales categories. In the absence of actual reported data, you can enter or have the system attempt to estimate sales data. You enter the estimated information on the Sales Report Details page and set the type to Estimated. The Sales Report Details page is a worksheet to enter and calculate the total sales amounts. The system uses past data to help determine an appropriate estimate.

Weekly Sales Method

The system will allow only one sales category on the percent rent setup. The system will use this category to create the sales report and import sales. This method will use only current period sales data.

If the bill amount is less than the minimum fee, the percent rent shall be zero and only the minimum rent will be charged. If the bill amount is more than the minimum fee, it calculates percent rent (sales overage) rent by deducting the minimum fee from the total bill amount. If the bill amount is more than the maximum fee then the maximum fee will be charged. Sales overage rent will be equal to the Maximum Fee - Minimum Fee.

The system shall apply breakpoints to calculate the percent as follows:

If the operator is Percent then:

• If sales amount is between first breakpoint range, then:

  First breakpoint's billable amount = (Sales amount – First breakpoint's from amount) * First breakpoint's percent.

• If sales amount is between second breakpoint range, then:

  Second breakpoint billable amount = (Sales amount – Second breakpoint's from amount) * Second breakpoint's percent.

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = (Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent.

If the operator is Amount, then:

• If sales amount is between first breakpoint range, then:

  First breakpoint billable amount = First breakpoint's fixed amount.

• If sales amount is between second breakpoint range, then:

  Second breakpoint Billable amount = Second breakpoint's fixed amount.

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = Nth breakpoint's fixed amount

If the operator is Both, then:

• If sales amount is between first breakpoint range, then:

  First breakpoint billable amount = (Sales amount – First breakpoint's from amount) * First breakpoint's percent + First breakpoint's fixed amount.

• If sales amount is between second breakpoint range, then:

  Second breakpoint billable amount = (Sales amount – Second breakpoint's from amount) * Second breakpoint's percent + Second breakpoint's fixed amount.

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = (Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent + Nth breakpoint's fixed amount.

• Total bill amount = first breakpoint's billable amount + second breakpoint's billable amount +…. + Nth breakpoint billable amount.

• If the total bill Amount is less than minimum fee, then the sales overage rent will be zero.

• If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get the sales overage rent.

Weekly Sales Method Calculation Example

Assume the minimum is 2,500 USD and the maximum is 5,000 USD.

Breakpoints:

Sales reported by tenant:

Each Period Method

This method will use only current period sales data. This calculation method will always have one sales category, which will be used for reporting/importing sales.

The system will annualize sales amount by multiplying the no. of periods in the calendar year. The system will apply breakpoints to annualized sales for calculating percent rent.

The annualized amount = current period's sales amount * Total Periods in a fiscal year.

The system shall apply breakpoints to calculate the percent as follows:

If the operator is Percent then:

• If the sales amount is between first breakpoint range, then:

  First breakpoint's billable amount = (Annualized Sales amount – First breakpoint's from amount) * First breakpoint's percent.

• If sales amount is between second breakpoint range, then:

  Second breakpoint's billable amount = (Annualized Sales amount – Second breakpoint's from amount) * Second breakpoint's percent).

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint's billable amount = (Annualized Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent).

If the operator is Amount, then:

• If sales amount is between first breakpoint range, then:

  First breakpoint's billable Amount = First breakpoint's fixed amount.

• If sales amount is between second breakpoint range, then:

  Second breakpoint's billable amount = Second breakpoint's fixed amount).

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = Nth breakpoint's fixed amount).

If the operator is Both, then:

• If sales amount is between first breakpoint range, then:

  First breakpoint's billable amount = (Annualized Sales amount – First breakpoint's from amount) * First breakpoint's percent + First breakpoint's fixed amount.

• If sales amount is between second breakpoint range, then:

  Second breakpoint's billable amount = (Annualized Sales amount – Second breakpoint's from amount) * Second breakpoint's percent + Second breakpoint's fixed amount.

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = (Annualized Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent + Nth breakpoint's fixed amount.

Total billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth breakpoint billable amount

If the total bill amount is less than minimum fee, then the percent rent will be Zero and only minimum fee will be charged.

If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get percent rent.

Each Period Calculation Example

Assume that the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Sales Reported by tenant:

Cumulative Method

System will calculate YTD sales amount by summing sales from the first period of the current fiscal year to current period. This calculation method will always have one sales category, which will be used for reporting/importing sales. Breakpoints will be applied to cumulative sales for calculating percent rent.

The previous YTD bill amount excluding current period will be deducted from the total bill amount to get current period's bill amount.

The YTD sales amount will equal to sum of sales amount from first period to current period. Note: The = YTD sales amount will include current period's sale amount.

The previous YTD bill amount is the sum of the bill amount from first period to previous period. Note: Previous period will be one period before the current period.

If the Operator is Percent then:

• If YTD Sales Amount is between First breakpoint range, then

  First breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent

• If sales amount is between second breakpoint range, then:

  Second breakpoint's YTD Bill Amount = (YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent.

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint's YTD Bill Amount = (YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent).

If the Operator is Amount, then:

• If YTD Sales Amount is between First breakpoint range, then:

  First breakpoint's YTD billable Amount = First Breakpoint's Fixed Amount.

• If YTD sales amount is between second breakpoint range, then:

  Second breakpoint's YTD Billable Amount = Second Breakpoint's Fixed Amount)

• If YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint YTD Billable Amount = Nth breakpoint's fixed amount)

If the Operator is Both, then:

• If YTD Sales Amount is between First breakpoint range, then:

  First Breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent + First Breakpoint's Fixed Amount.

• If YTD sales amount is between second breakpoint range, then:

  Second breakpoint's YTD Billable Amount = (YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount.

• If YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint YTD Billable Amount = (YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount.

Total YTD Billable amount = First breakpoint's YTD bill amount + Second breakpoint's YTD bill amount +…. + Nth Breakpoint YTD Bill Amount

Current period's billable amount = total YTD billable amount – previous YTD bill amount

If the total bill Amount is less than minimum fee, then the sales overage rent will be zero.

If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get the percent rent (sales overage).

If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.

When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it will equal to:

(Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent when operator is percentage

Breakpoint's fixed amount when operator is 'fixed':

(Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both

Cumulative Calculation Example

Assume the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Sales reported by tenant:

Cumulative Pro Rata Method

YTD sales amount including current period sales will be used to calculate percent rent. This calculation method will always have one sales category.

The sales amount will be annualized by multiplying the YTD sales with the no. of periods in a calendar year divided by no. of sales periods included in YTD sales. Breakpoints will be applied to annualized cumulative sales when calculating percent rent.

To calculate current period bill amount, percent rent amount will be de-annualized and from that amount the previous YTD bill amount will be reduced.

Add YTD sales to get the Cumulative amount. The YTD sales amount will be the sum of sales amount from first period to current period. Note: Include current period sales into YTD sales. Annualize the YTD sales. Annual sales amount = YTD sales * (total periods in fiscal year/ no. periods in YTD sales). Calculate YTD bill amount by applying lease level breakpoints to annualized cumulative sales.

If the Operator is Percent then:

• If Sales Amount is between First breakpoint range, then:

  First breakpoint Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent

• If sales amount is between second breakpoint range, then:

  Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint's Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)

If the Operator is Amount, then:

• If sales Amount is between First breakpoint range, then:

  Bill Amount = First Breakpoint's Fixed Amount

• If sales amount is between second breakpoint range, then:

  Bill Amount = (First Breakpoint maximum Bill Amount + Second Breakpoint's Fixed Amount)

• If sales amount is between Nth breakpoint range, then:

  Bill Amount = (First breakpoint's maximum bill amount + Second breakpoint's maximum bill amount +….+(n-1) breakpoint's maximum bill amount + Nth breakpoint's fixed amount)

If the Operator is Both, then:

• If Sales Amount is between First breakpoint range, then:

  First breakpoint's Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount

• If sales amount is between second breakpoint range, then:

  Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's percent + Second Breakpoint's fixed amount)

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint billable amount = (Annualized YTD sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount

Total annualized YTD Billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth Breakpoint Billable Amount

De-annualize the above value to get YTD billable amount. YTD billable amount = Total annualized YTD billable amount * (No. periods in YTD sales / Total periods in fiscal year)

System will calculate Total bill amount by deducting previous YTD bill amount from rent calculated in step above (de-annualized rent).

If the total bill Amount is less than minimum fee, then the sales overage rent will be zero. If the total bill amount is more than minimum fee, then deduct minimum fee from total bill amount to get sales overage rent. If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.

When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it shall equal to: (Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent when operator is percentage

Breakpoint's fixed amount when operator is fixed: (Breakpoint's "To amount" - Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both

Cumulative Pro Rata Calculation Example

Assume the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Sales reported by tenant:

Modified Cumulative Method

YTD sales amount including current period sales will be used to calculate percent rent. This calculation method will always have one sales category. The following calculation shall be used when calculating percent rent:

Get the highest breakpoint that the total sales amount is reached. Apply the highest breakpoint to the entire sales amount that exceeds the first breakpoint. The YTD bill amount excluding current period will be deducted from the total bill amount to get current period's bill amount.

The YTD sales amount is equal to sum of sales amount from first period to current period. Note: The = YTD sales amount includes current period's sale amount.

If the Operator is Percent then:

• If YTD Sales Amount is between First breakpoint range, then:

  First breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint's YTD Bill Amount = (YTD Sales amount – First breakpoint's From amount) * Nth breakpoint's Percent

If the Operator is Amount, then:

• If YTD Sales Amount is between First breakpoint range, then:

  First breakpoint's YTD billable Amount = First Breakpoint's Fixed Amount

• If YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint YTD Billable Amount = Nth breakpoint's fixed amount

If the Operator is Both, then:

• If YTD Sales Amount is between First breakpoint range, then:

  First Breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent + First Breakpoint's Fixed Amount

• If YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint YTD Billable Amount = (YTD Sales amount – First breakpoint's From amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount

Total YTD Billable amount = First breakpoint's YTD bill amount + .... +Nth Breakpoint YTD Bill Amount

Current period's billable amount = total YTD billable amount – previous YTD bill amount

If the total bill Amount is less than minimum fee, then the sales overage rent shall be Zero. If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get sales overage rent. If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.

When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it is equal to: (Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent when operator is percentage

Breakpoint's fixed amount when operator is fixed: (Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both

Modified Cumulative Calculation Example

Assume the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Sales reported by tenant:

Partial Year Pro Rata Method

In a specialized billing reconciliation, property owners use the lease period as a cutoff date. Therefore, any tenant who moves in or out within the lease period can be charged a prorated share of the sales for the partial period. For calculating the prorated rent amount, the sales data for the period of one year beginning from lease commencement date will be considered. In the case of last period, the sales data for the period of one year ending on lease termination date will be used for calculating rent. System will use the following formula for calculating the rent amount:

• First period = Rent calculated as per breakpoints * (Next period begin date – Lease Commencement date) / (Number of days in the year)

• Last period = Rent calculated as per breakpoints * (Lease Termination date - previous period End Date) / (Number of days in the year)

If the prorate first and last period Partial Year Proration flag is checked on the Percent Rent Terms page, then first and last period percentage rent will be calculated by this method. Rent calculated as per breakpoint will be as per the calculation method selected on the lease. The partial year prorata feature can be used only with annual calendars. In the formula mentioned above, by default, if the partial year proration checkbox is checked then the number of days in the denominator would be same as actual number of days in the year (365/366). If on financial terms page the user has selected the 360 days proration method, then in that case the denominator value in formula mentioned above will be 360.

Partial Year Pro Rata Calculation Example

Assume the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Sales reported by tenant:

Lease Pro Rata Method

This method uses two levels of breakpoints: Lease level and Sales reporting categories level. Lease level breakpoints will be used to calculate total bill amount on total sales of all categories. Category level breakpoints will be used to distribute bill amount by category.

YTD sales amount that includes current period sales will be used to calculate percent rent. Sales amount will be sum of all sales categories' sales amount. The sales amount shall be annualized by multiplying the no. of periods in a calendar year divided by no. of sales periods included in YTD sales.

Lease level breakpoints will be applied to annualized cumulative sales to calculate percent rent amount. The rent amount will be de-annualized by dividing calculated rent by the no. of periods in a calendar year and then multiplying the same by number of sales periods included in YTD sales. To calculate current period bill amount, the previous periods YTD bill amount will be reduced from the amount calculated inn the step above.

If rent amount for the current period is less than the minimum fee then minimum fee will be charged to tenant as percentage rent. If rent amount for the current period is greater than maximum fee then maximum fee will be charged as percentage rent.

This method does not categorize the rent as minimum and percentage rent. For this method, the total rent amount will be distributed by categories.

To prorate the total bill amount among the categories:

• YTD sales amount for the category will be used for calculation.

• The category's sales amount will be annualized by multiplying the no. of periods in a calendar year divided by no. of sales periods included in YTD sales.

• Category level breakpoints will be applied to annualized cumulative sales to get the category's bill amount. This calculation will be performed for all categories.

• The total rent amount will be distributed among sales categories using ratio of amount calculated in step above. If none of the category has reached its breakpoint then the rent amount will be distributed in ratio of cumulative sales for all categories.

Get the total sales amount by summing up all sales categories sales.

Calculate the YTD (Year-To-Date) sales by summing up all sales from first period to current period.

Annualize the YTD sales. Annualized YTD sales = YTD sales * (Total periods in fiscal year / No. periods in YTD sales).

If the Operator is Percent then:

• If annualized YTD Sales Amount is between First breakpoint range, then:

  First breakpoint Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent

• If annualized YTD sales amount is between second breakpoint range, then:

  Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent

• If annualized YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint's Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)

If the Operator is Amount, then:

• If annualized YTD Sales Amount is between First breakpoint range, then:

  Bill Amount = First Breakpoint's Fixed Amount

• If annualized YTD sales amount is between second breakpoint range, then:

  Bill Amount = (First Breakpoint maximum Bill Amount + Second Breakpoint's Fixed Amount)

• If annualized YTD sales amount is between Nth breakpoint range, then:

  Bill Amount = (First breakpoint's maximum bill amount + Second breakpoint's maximum bill amount +….+(n-1) breakpoint's maximum bill amount + Nth breakpoint's fixed amount)

If the Operator is Both, then:

• If Sales Amount is between First breakpoint range, then:

  First breakpoint's Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount

• If sales amount is between second breakpoint range, then:

  Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount)

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount

Total annualized YTD Billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth Breakpoint Billable Amount

De-annualize the above value to get YTD billable amount. YTD billable amount = Total annualized YTD billable amount * (No. periods in YTD sales / Total periods in fiscal year)

Subtract the Previous period YTD bill amount to get the current Total Bill amount.

Prorate the Total bill amount among all the sales categories using the following method:

• Calculate the YTD (Year-To-Date) sales by summing up a category's sales from first period to current period.

• Annualize the category YTD sales. Annualized YTD category sales = category YTD sales * (Total periods / No. periods in YTD sales).

Apply the category level breakpoints:

If the Operator is Percent then:

• If annualized YTD category Sales Amount is between First breakpoint range, then:

  First breakpoint Billable Amount = (Annualized YTD category Sales amount – First breakpoint's from amount) * First breakpoint's Percent

• If annualized YTD category sales amount is between second breakpoint range, then:

  Second breakpoint's Billable Amount = (Annualized YTD category Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent

• If annualized YTD category sales amount is between Nth breakpoint range, then:

  Nth breakpoint's Billable Amount = (Annualized YTD category Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)

If the Operator is Amount, then:

• If annualized YTD category Sales Amount is between First breakpoint range, then:

  First Breakpoint's category Billable Amount = First Breakpoint's Fixed Amount

• If annualized YTD category sales amount is between second breakpoint range, then:

  Second Breakpoint's category Billable Amount = Second Breakpoint's Fixed Amount

• If annualized YTD sales amount is between Nth breakpoint range, then:

  Nth breakpoint's category Bill Amount = Nth breakpoint's fixed amount

If the Operator is Both, then:

• If annualized YTD category Sales Amount is between First breakpoint range, then:

  First breakpoint's category Billable Amount = (Annualized YTD category Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount

• If sales amount is between second breakpoint range, then:

  Second breakpoint's category Billable Amount = (Annualized YTD category Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount)

• If sales amount is between Nth breakpoint range, then:

  Nth breakpoint Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount

Annualized YTD category Billable amount = First breakpoint's category billable amount + Second breakpoint's category billable amount +…. + Nth Breakpoint category Billable Amount

Category's bill amount = Total billable amount * Annualized YTD category Billable amount / sum of all sales categories annualized YTD category billable amount.

If the total bill Amount is less than minimum fee, then the minimum rent will be charged as percentage rent. If the total bill Amount is greater than maximum then maximum fee will be charged as percentage rent.

When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it shall equal to: (Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent when operator is percentage

Breakpoint's fixed amount when operator is fixed: (Breakpoint's To amount - Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both

Lease Pro Rata Calculation Examples

Assume the minimum is 2,500 USD and the maximum is 50,000 USD.

Breakpoints:

Method details:

• Tenant will report sales at agreed frequency.

• Billing for percent rent will be as per calendar defined on the percent rent term page.

• Even though sales are reported category wise the breakpoints will be applied to annualized cumulative total sales figure.

• For calculating cumulative and annualized sales, all reported/estimated sales report in current year will be considered.

• Breakpoints will be applied to annualized sales.

• Percent rent amount charged for previous period will be reduced from the calculated amount.

Sales reported by tenant:

For the following sales categories assume that the percent rent amount for the period will be distributed in ration of amount calculated category wise on sales category breakpoint and if in any period none of the categories exceed first breakpoint then percent rent for the period will be distributed in ratio of sales.

Food breakpoints:

Beverages Breakpoints:

Liquor Breakpoints:

Period 1 percent rent = 5,083.33

Period rent details:

Period 2 percent rent = 12,583.33

Period rent details:

Period 3 percent rent = 2,500

Period rent details:

Period 4 percent rent = 22,866.67

Period rent details:

Period 5 percent rent = 50,000

Period rent details:

Period 6 percent rent = 15,966.67

Period rent details:

Sales Estimation Methods

The PeopleSoft Real Estate Management system provides you with three sales estimation methods to assist you in deciding the estimated sales data. Using this data helps you determine the monthly rent amount.

The three sales estimation methods are:

• Past 6 Period Average: The system takes an average of sales of all prior periods up to six months, assuming there is sales data for the last six months in the database.

  If data is not available for all six months, it takes only the average of whatever data is available up to the last six months. The system cannot provide an estimate if there is no data for the last six months.

• Same Period Last Year: The system takes the sales from the same period last year assuming there is sales data for the same period last year.

  For example, if the current sales report being estimated is period 2 of 2005, then the system looks for period 2 of 2004 to formulate an estimate. The system cannot provide an estimate if there is no data for the same period last year.

• Prior Period: The system takes the sales for the preceding period, assuming there is sales data for the preceding period. The system cannot provide an estimate if there is no data for the preceding period.

  Note. In addition to the sales estimation methods, the system also provides an adjustment factor that is a percentage field, at the lease level, to assist with altering the numbers to account for slower business, recession periods, inflation, and so on.

Adjustments to Estimated Rents

When you bill based on estimated sales, you will likely need to make adjustments, effectively changing the actual billable rent amount. The system provides the ability to adjust the previously calculated and processed data, as well as the ability to adjust the prior entries posted to the various subsystems. This is called the sales report revision.

A change to previously processed calculated data is called an adjustment. You can change sales report data any number of times before the transactions are processed. While making an adjustment, you select the sales type to indicate the changes that you are making. The sales type has no bearing on generating billing lines; it is informational only. The same billing lines are generated regardless of type and are updated at any time throughout this process.

When you enter the new data, the system calculates the rent amount on the worksheet. However, the system also takes into account the last processed worksheet and compares the two to determine the amount of the adjustment. Although the data from worksheet to worksheet is compared to determine the net difference, doing so accurately over multiple iterations can be complicated. As a result, the system uses the last of the prior worksheets to determine the amount billed. The system creates a complete reversal of the bill, sending a negative bill entry to the same transaction code by sales category, and updates the bill with the new amounts. For example, the original worksheet has three sales categories and three bill lines generated for billing, each with a unique transaction code. During an adjustment process, three negative bill line entries are created for the full amount billed, along with three new bill lines for the new full amount to bill.

On the Sales Report Details page for processed reports, the latest worksheet appears as display-only until you click the Update Report button. The worksheet is then available for changes, and a new version is saved to the table with a new revision number. You can view all past adjustments, but adjust only the latest one.

Prerequisites

Before setting up percent rent terms, you must set up the following:

• Detail calendars for percent rent schedules.

• Calendar ID selection for the business unit.

• Sales categories.

• Transaction routing codes.

• Accounting rules.

Setting Up Percent Rent Terms

This section discusses how to enter percent rent terms.

Pages Used to Set Up Percent Rent Terms

Entering Percent Rent Terms

Access the Financial Terms - Percent Rent page (click the Percent Rent link on the Financial Terms page).

Fields and buttons available in the group boxes vary depending upon the calculation method selected.

Breakpoints

Breakpoints are available for edit only when the lease is in a pending or amendment status.

Reporting Sales and Calculating Percent Rent

This section provides an overview of sales reporting and percent rent calculation and discusses how to:

• Search for sales reports.

• Find missing sales reports.

• Create new sales reports and calculate percent rent.

• Import sales reports.

• Process sales reports.

Understanding Sales Reporting and Percent Rent Calculation

When setting the percent rent terms in a lease, the sales reports form the basis that the system uses to calculate rent. After you set the percent rent terms and activate the lease, you begin working with the tenant sales reports to periodically generate the rent invoices.

You collate, enter, and revise all reported sales figures for the past period in the Report Sales - Sales Report Details page. This page enables you to enter estimated or actual figures, and the system calculates the appropriate rent amount, taking into consideration the percentage breakpoints and base rent setup. The system uses the percent and fixed amount selection and enters a fixed amount for every breakpoint row.

Note. You can select a billing calendar for a lease that suits your billing frequency. If the tenant reports sales in a different frequency than billing, you can select a billing calendar for a lease that suits your billing frequency.

The system populates the categories that are set up in the lease by default. You cannot add any additional rows for categories because they have to be set up on the lease to exist on the worksheet to provide validations.

You can isolate missing sales reports. For the missing reports, you can enter estimated information. Based on the sales estimation method and the adjustment factor that you selected while setting up the percent rent terms, you can estimate the sales.

After bringing the data from the estimation tools into the worksheet, the system enables you to adjust the calculated data. If the system is unable to generate an estimate, it displays a warning indicating the reason. Once you are satisfied with the estimate, you can click Create Pending Invoice in the worksheet and initiate the transfer to Billing or PeopleSoft Payables for further processing. The Create Pending Invoice button is visible only when the billing calendar and reporting calendars are same on the lease. If they are different, users need run the Process Sales Reports process to generate the bill. As in normal sales reporting, the system saves the estimates along with the date, time, and user ID to the database for historical purposes.

Importing Sales Reports

You can populate the into the Report Sales - Sales Report Details page by importing the sales reports from a file. Before you can import sales reports, you must set up the URL path for attachments and configure the sales report file format.

Access the URL Maintenance page for the RE_ATTACHMENTS identifier and enter the URL in the format ftp://<username>:<password>@<machinename>/directory name. The user name and password are critical, as the system uses these to connect all users to the FTP server. The <machinename> is the physical name by which the FTP server is identified on the network. You can include the directory name on the server where the sales report attachments are stored, or you can store the sales report attachments in the root directory of the FTP server. If you store the resume attachments anywhere but the root of the FTP server, you must append the directory name to the URL.

To populate the Report Sales - Sales Report Details page, the system uses data from the file along with lease data that already exists.

This table contains the record fields that the file must contain along with the structure of the fields:

The system accepts only the translate values for the Sales Amount Type field. These are the valid values with their descriptions:

• 1: Reported

• 2: Estimated

• 3: Actual

• 4: Audited

The file layout uses the comma separated value (CSV) format and is mapped to the sales report file received. The file contains eight fields to map the sales report data received and rest of the information to create a sales report is retrieved from the corresponding lease.

This table contains sample data that the sales report file should contain. You cannot change the order of fields and the values must be separated by commas.

Effects of Lease Amendments on Sales Reporting

When you change a percent rent term setup because of a lease amendment, these changes are reflected during the update of a pending sales report. The changes result in an adjustment to the sales report. The recalculation is done automatically. The following occurs when you create a lease amendment:

• If you want to add a category, do so when updating a pending or adjusting sales report.

• If you delete a category, the category becomes display-only to prevent changes.

  If the amendment is done for a sales revision, the amendment creates only a negative amount for the deleted category.

• The amendment to the minimum fee or maximum fee and sales adjustment factor impacts the total rent.

Pages Used to Report Sales and Calculate Percent Rent

Searching for Sales Reports

Access the Report Sales - Sales Reports page (Real Estate Management, Receivables Leases, Enter Sales Reports).

Filter search results by entering specific values in the fields in the Search Criteria group box. You must enter the business unit. If you enter only a business unit, the search returns all sales reports for all leases within that business unit.

Finding Missing Sales Reports

Access the Report Sales - Find Missing Sales Reports page (click the Find Missing Sales Reports link on the Sales Reports page).

The system displays all of the missing sales reports based on the search criteria that you enter, regardless of lease status.

Creating New Sales Reports and Calculating Percent Rent

Access the Report Sales - Create New Sales Reports page (click the Create New Sales Reports button on the Report Sales - Sales Reports page).

Sales Period	Displays the date range for this sales report.
Fiscal Year	Displays the year to which this accounting period refers.
Accounting Period	Displays the accounting period for this sales report.
Billing Calendar	Displays the billing calendar for this sales report.
Lease Number	Click to access the Financial Terms - Percent Rent Details page on which you can view the breakpoints for this lease.
Payee	Displays the entity to whom you make payments. This field appears only for payables leases.
Payor	Displays the entity that is responsible for making payments. This field appears only for receivables leases.
Calculation Method	Displays the calculation method selected on the Financial Terms – Percent Rent page.
Partial Year Proration	This checkbox is selected if you selected partial year proration on the Financial Terms – Percent Rent page.
Revision	Displays the latest revision number. Shows the number of adjustments for this period.
Type	Select the type of sales reporting figures being entered. You can change the type with an amendment if more accurate numbers are determined. The type enables you to classify the sales report by the values defined. The system delivers four values that you can use interchangeably. You can use any combination of these values: Estimated: The estimated figure is either generated by the system or entered on behalf of tenant estimates. When the system generates a sales estimate, this value is automatically defaulted on the estimated row. Reported: The figure is reported by tenant, but with possibly no documentation. Actual: The tenant provides documentation of the actual figures. Audited: The tenant provided an audited report or the landlord sent an auditor in to audit the figures. Note. If you change the type from Estimated to any of the other values, you cannot change it back to Estimated.
Sales Amount	Enter the sales amount based on the type that you select for the Type field.
	Click the Exchange Rate Detail icon to access the View Exchange Rate Detail page on which you can view the details of the exchange rate that the system used to calculate the converted sales amount.
Converted Sales Amount	Displays the sales amount converted back to the base currency of the lease.
Calculate	Click to calculate the bill amount based on the converted sales amount and the breakpoint using percent, amount, or both. You can enter different sales amounts to calculate and recalculate the billing amount until the calculated bill amounts are acceptable to you.
Current Total Sales	Displays the amount to be billed or the amount to be paid depending on the type of lease that you are using. The system calculates the amount from the percent rent terms.
Current Total Bill	Click this link to access the Sales Calculation Log page. Note. This value appears as display only for the category based method and the lease prorata method.
Create Pending Invoice or Create Pending Payment	Click to calculate the rent and submit the bill amount to the transaction queue for approval. The system changes the status from Pending to Processed. If the transaction is rejected in the billing transaction queue, the status of the sales report changes from Processed back to Pending. This is available only when the reporting and billing calendars are same. When they are different, the invoice or payment is created using the Process Sales Reports process.

Importing Sales Reports

Access the Report Sales - Sales Report (import) page (click the Import Sales Report button on the Report Sales - Sales Reports page).

Attached File	Displays the name of the file that you uploaded.
Lookup File	Browse through your files to locate the percent sales report and upload it to the ftp server. See Defining an FTP Server for Document Attachments.
Auto Process Sales Reports	Select this check box to enable the system to automatically calculate percent rent amounts and create transactions for the imported rows.
Import Sales Report	Click to import the values of the uploaded file into a sales report.

Processing Sales Reports

Access the Process Sales Reports page (Real Estate Management, Lease Administration, Integrations, Process Sales Reports).

	Click to access the Sales Reports to be Processed page and view a list of reports that will be processed.
Process Option	Billing Calendar: Allows users to search and select billing schedules based on Billing calendar, Fiscal Year and Accounting period. Date Ranged: Allows users to search and select billing schedules based on Billing Schedules Start Date and End Date. Lease Based: Allows users to search and select billing schedules based on Business Unit or both Business Unit and Lease Number.
From Date	This field appears if you select the Date Ranged process option.
To Date	This field appears if you select the Date Ranged process option.
Lease Number	This field appears if you select the Lease Based process option.
Billing Calendar	This field appears if you select the Billing Calendar process option.
Fiscal Year	This field appears if you select the Billing Calendar process option.
Accounting Period	This field appears if you select the Billing Calendar process option.
Load Billing Schedules	Click to load the billing schedules into the grid, based on the processing option selected and entered values. All the Billing Schedules that are loaded into the Grid and which don't have any errors will be processed by the Application Engine.

The system completes the following actions for each billing schedule selected:

• Retrieves all sales reports for the lease, whose sales period end date falls between the billing schedule start date and billing schedule end date

• Updates the sales reports for any lease amendments.

• Calculate the bill amount based on the billing calendar. The consolidated bill amount will reflect on all the sales reports processed.

• Marks the sales report as Processed and the billing schedule as Generated.

• Updates the sales report submission details, submission date time and submission user ID.

Billing schedules in error will be ignored (not processed) by the application engine.