Creating Lease Expense Schedules

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

You must run this process:

  • After setting up a step lease.

  • After adjusting transactions in a step lease.

  • Before running the depreciation close process.

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

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

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

  • For operating leases, the lease expense schedule allocates non-monthly payments to monthly amounts.

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

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

Payment Date

Payment Amount

Interest Expense

June 1, 2009

300

33

The lease expense schedule allocates the payments as shown:

Payment Date

Payment Amount

Interest Expense

April 1, 2009

0.00

11

May 1, 2009

0.00

11

June 1, 2009

300

11

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

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

Page Name

Definition Name

Usage

Create Expense Schedule Page

LEASE_SCHED2_RQST

Run the lease expense schedule process.

Use the Lease Expense Schedule page (LEASE_SCHED2_RQST) to run the lease expense schedule process.

Navigation:

Asset Management > Asset Transactions > Leased Assets > Create Expense Schedule > Create Expense Schedule

This example illustrates the fields and controls on the Create Expense Schedule page. You can find definitions for the fields and controls later on this page.

 Create Expense Schedule page

Field or Control

Description

Select Open Trans Range (select open transaction range)

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

Select Asset Range

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