Understanding Calculation Methods for Detail Assumptions
You can select from eight different calculation methods when you set up detail assumptions. The calculation method specifies whether the system uses a growth pattern, a rate, or both to forecast the amounts. The calculation method also determines when the system updates the forecasted amounts to the specified account:
For calculation methods 1, 2, 3, 4, 7, and 8, the system updates the forecasted amounts to the first period of the first year for which the assumption or real estate lease is effective.
For example, if the assumption is in effect at January 1, 2007, for a term of three years (through December 31, 2010), the system updates the forecasted amounts for all four years to the first period of year 07.
For calculation method 5, the system updates the forecasted amounts for each period for which the assumption or real estate lease is effective.
For calculation method 6 and other assumptions (assumption type OT), the system updates the forecasted amount to the first period of each year for which the assumption or real estate lease is effective.
Note: The system uses the company's fiscal date pattern that is assigned to the building to determine the period to update. For example, if the company that is assigned to the building is set up with a fiscal date pattern that begins June 1 and ends May 31, and the assumption or real estate lease begins in period 01, the system updates the forecasted amount to June.
You can set up multiple detail assumptions for a single header assumption. You must enter an assumption type and calculation method for each detail assumption, besides assumption type OT (Other Assumptions) which does not require a calculation method. The system applies the growth pattern to the calculated result, multiplying the market rate by the unit area to derive the base forecasted amount.
The system requires that you complete specific fields based on the assumption type and the calculation method. This table lists the fields that you must complete with the corresponding values, if applicable, when you use the calculation method specified:
Calculation Method |
Post Bill Code or Object Account |
Retrieval Bill Codes* |
New Rate |
Renewal Rate |
Amount Type |
Growth Pattern |
---|---|---|---|---|---|---|
1 Percentage of Base Rent |
Required |
Optional |
Required |
Required |
PC (Percent) |
Not Available |
2 Percentage of Base Rent Compounded |
Required |
Optional |
Required |
Required |
PC (Percent) |
Percentage |
3 Square Foot Market Rate |
Required |
Not Available |
Required |
Required |
SF (Square Foot) |
Not Available |
4 Fixed Base Rent Compounded |
Required |
Optional |
Required |
Required |
FX (Fixed) |
Fixed |
5 Monthly Sq. Foot Market Rate |
Required |
Not Available |
Required |
Required |
SF (Square Foot) |
Not Available |
6 Fixed Market Rate |
Required |
Not Available |
Required |
Required |
FX (Fixed) |
Not Available |
7 Custom Schedule |
Required |
Optional |
Not Available |
Not Available |
Not Available |
Any Type |
8 Square Foot Amount |
Required |
Not Available |
Required |
Required |
SF (Square Foot) |
Any Type |
*If you do not specify a retrieval bill code, the system uses only the rate specified in the assumption header.
Budgeted amounts based on the assumption details can be posted to either the account represented by the bill code entered in the Posting Bill Code field or the account entered in the Object Account field.
If you enter an object account, the system uses this hierarchy, from most specific to least specific, to validate that the account is set up in the Account Master table (F0901):
The system concatenates the object account number with the building number. For example, if you enter object account 5360 and the building number is 17101, the system searches for account 17101.5360.
If the system cannot locate the account, it concatenates the object account number with the property number.
If the system cannot locate the account, it concatenates the object account number with the building company number. For example, if building 17101 is set up for company 150, the system searches for account 150.5360.
If the system cannot locate the account, it displays an error.
When the JD Edwards EnterpriseOne Real Estate Management (REM) lease is effective, the system uses the recurring billing information, which is actual amounts, to determine the base rent (revenue) amount to which the rate (from the assumption detail) is applied to forecast the expense amount of the commission or tenant improvements. If the system cannot locate recurring billing information to use, either because it is not set up or has expired prior to the lease end date, the system uses the rate from the assumption header to calculate rent revenue for the duration of the lease.
When the unit assumption is effective, the system multiplies the area of the unit by the market rate from the assumption header. It then applies the growth pattern (from the assumption header) to derive the base rent (revenue) amount to which the rate, or growth pattern, or both (from the assumption detail) are applied to forecast the expense amount of the commission or tenant improvements.