Understanding Sales Overage Processing

A common industry practice for retail leases is for landlords to calculate rent as a percentage of the tenant's reported sales. In return for a lower fixed rent amount or no fixed rent amount, tenants pay a percentage of their sales after they exceed a specific amount or breakpoint. Because the tenant pays on the amount over the breakpoint, this billing process is referred to as sales overage.

Like expense participation, you can set up sales overage processing in JD Edwards EnterpriseOne Real Estate Management and in JD Edwards EnterpriseOne Advanced Real Estate Forecasting.

For leased units that contain sales overage information, the system retrieves sales overage information from the JD Edwards EnterpriseOne Real Estate Management system when you run the AREF Budget Calculation program (R15L1091). The system retrieves the actual sales amounts from the Sales History Work File table (F1541BW). If the system cannot locate actual sales amounts, the system retrieves projected sales amounts from the Projected Sales table (F1542) and copies it to the AREF Project Sales table (F15L301).

If you set up the sales overage information in JD Edwards EnterpriseOne Real Estate Management for computation method 0, you can set a processing option in the AREF Budget Calculation program (R15L1091) to process sales overage using the rules from JD Edwards EnterpriseOne Advanced Real Estate Forecasting.

Note: Because current releases of JD Edwards EnterpriseOne Advanced Real Estate Forecasting retrieve sales information and amounts from JD Edwards EnterpriseOne Real Estate Management, the R15L3011 and P15L301 programs are no longer necessary. However, you can use these programs for informational purposes.

If you do not set up sales overage information in the JD Edwards EnterpriseOne Real Estate Management system or if the unit is not leased, the system uses period sales amounts from the AREF Unit Master table (F15L101) in JD Edwards EnterpriseOne Advanced Real Estate Forecasting to calculate sales overage. The system does not process sales overage if it cannot locate any sales amounts.

See Forecasting for Sales Overage.

This table describes the steps you must complete to process sales overage amounts:

Step	Description
Set up sales overage rules.	You use the sales overage rule to specify the calculation method, the breakpoint amount, and the percentage by which the system multiplies the sales amounts to determine the sales overage amount.
Assign the sales overage rule to units or to the building constants.	You can assign up to three sales overage rules to a unit. If you want to use the same sales overage rule for all units, you can set it up as a default value in the building constants, instead of assigning it to each unit.
Assign period sales amounts to each unit.	You must enter period sales amounts for each unit for which you want to process sales overage using the AREF Unit Maintenance program (P15L101).
Assign annual recapture amounts to each unit (optional)	The system does not calculate sales overage for a recapture amount. The system uses the recapture amount in the same manner that it uses the minimum rent amount in JD Edwards EnterpriseOne Real Estate Management: it divides the amount by 12 and subtracts it from the period amount for which sales overage is calculated. For example, if you assume that the tenant pays a minimum rent amount of 12,000 annually, the system subtracts 1,000 from the sales overage amount for each period.
Run the AREF Budget Calculation program (R15L1091).	If you set the Sales Overage Calculation processing option to calculate sales overage, the system runs the AREF Sales Overage Budget Calculation program (R15L1097) and updates the AREF Budget Results table (F15L109) and the AREF Prior Gross Billings table (F15L302). Note: The system does not perform calculations for accruals or year-end override records.