Creating Lease Administration Business Units

General Ledger

Displays general ledger business unit. This general ledger business unit defines the accounting processing for the associated lease administration business unit for straightline accounting entries. All leases with straightline accounting entries created for this lease administration business unit post to the general ledger business unit specified here.

Asset Management

Displays asset management business unit. The asset management business unit (AMBU) defines the asset information associated with this lease administration business unit.

All leases created use the PeopleSoft Asset Management asset information to manage the life cycle of the lease for the asset 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), assets selected on leases under this lease administration business unit are restricted to only the assets under the business unit mapped here.

Accounts Payable

Select a payables business unit. All payments made for leases under a lease administration business unit are sent to Payables for processing using this business unit.

Contracts

Select a contracts business unit. When creating a lease in the lease administration 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.

General Ledger

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

Use AM Accounting Templates (Use Asset Management Accounting Templates)

Select this check box to disable GL account overrides for lease-level asset cost distributions. All GL account distributions related to the lease liability and right-of-use asset default from the Asset Management Accounting Entry Template.

When you select this check box, the Account and Prior Period Accounts tabs do not appear on the Asset Cost Distribution page.

For more information about Accounting Entry Templates, see Defining Accounting Entries.

Use AM Accounting Templates

Select this check box to create payables lease entries by the Depreciation Close process in Asset Management.

If the check box is not selected, then Lease Administration accounting rules will be used to send Payables and Receivables accounting entries needed to record the voucher and bill, respectively.

See Creating Accounting Entries

Rent & Miscellaneous Rent

Select to enable base rent and miscellaneous rent transactions to use the straightline accounting process by default for this lease administration 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 lease administration 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.

Unit of Measure

Select the default unit of measure for referencing the space measurement of a property in a lease for this lease administration business unit.

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.

Base Currency

Select the default base currency for this lease administration business unit. Lease transactions created in this lease administration 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.

Rate Type

Select the currency exchange rate type to be used when the system must perform currency translations for this business unit.

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.

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.

Recognize Monthly Expense

Select this option to enable the Recognize Monthly Expense option on the Create New Lease - Financial Terms Page.

You can still manually deselect the option on the Create New Lease - Financial Terms page, should you wish to do so.

This option prorates non-monthly financial terms (such as quarterly schedules) by period. Lease interest for finance leases and the amortization of the underlying assets for operating leases are recognized on a monthly basis.

Tolerances: Percent Rent

Define the percentage tolerances for a sales category amount for this lease administration 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.

Tolerances: Operating Expenses

Define the percentage tolerance for operating expense amounts for this lease administration 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.

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 Define Option Notifications Page.

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 check box 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 check box 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 check box 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 check box 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.

Lease Period to Useful Life

Enter a percentage to compare the lease period to remaining useful life.

Present Value Lease Payments to Asset Fair Value

Enter a percentage to compare the present value lease payments to the asset’s current fair value.

Percentage of Fair Value Considered a Bargain Price

Enter a percentage to compare a purchase option as a percentage of expected asset fair value at end of the lease. The default value is 0.

Recognize Capitalized Assets as Finance Under IFRS

Select this option to identify leases within the selected business unit as IFRS.

Recognize Capitalized Assets as Finance Under GASB

Select this option to identify leases within the selected business unit as GASB.

Lead Time (Days)

Specify the billing default transaction lead time for automatically generated transactions for this lease administration 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.

Accrual

Enter the transaction routing code for the system to use as a default for straightline accruals in this lease administration 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 lease administration 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 lease administration business unit. The routing code for adjustments determines the processing of receivables lease transactions in the general ledger.

Lead Time (Days)

Specify the payables default transaction lead time for auto-generated transactions for this lease administration 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

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.

Accrual

Enter the transaction routing code for the system to use as a default for straightline accruals in this lease administration 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 lease administration 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 lease administration business unit. The routing code for adjustments determines the processing of payables lease transactions in the general ledger.

Base Rent

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

See Understanding Transaction Routing Codes.

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.

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.

Bill Type

Select a default bill type for leases created under this lease administration 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.

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 By

Select a default bill by for leases created under this lease administration 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.