1. Real Estate Management Implementation Guide
  2. Calculation Method 5 Example

Calculation Method 5 Example

An owner or property manager can set up values in the JD Edwards Real Estate Management system constants to organize the billing operations for all the tenants for a fiscal lease year. A specialized billing reconciliation, such as sales overage, uses this lease year as the cutoff date. Therefore, any tenant who moves in or out within the lease year can be charged a prorated share of the sales for the partial year. The calculation includes the tenant's sales for either the ensuing 12 months if the calculation is associated with a move-in or the preceding year if the calculation is associated with a move-out. A daily proration is calculated from the sales and applied to the partial year.

You can also specify a period of sales either greater than or less than 12 months, if necessary. This value is controlled by the Beg Period (Beginning Period), Beg Year (Beginning Year), and Override Year values in the F15013B table.

For example, suppose that a tenant's lease begins on June 1, 2007, and the fiscal lease year begins on January 1. The calculation for sales overage is based on the owner's fiscal year rather than the tenant's rent year.

This example also assumes:

  • Sales from June 1, 2007, to December 31, 2007 = 85,000 USD.

  • Sales from January 1, 2008, to May 31, 2008 = 25,000 USD.

  • Dollar breakpoint = 50,000 USD.

  • Percentage due = 10.

The system performs the following steps to calculate the sales overage for the partial year:

  1. Adds the reported sales for a full year to determine the gross sales: (85,000 + 25,000 = 110,000).

  2. Subtracts the dollar breakpoint from the gross sales: (110,000 − 50,000 = 60,000).

  3. Multiplies the difference from step 2 by the percentage due to determine the gross overage billing: (60,000 × 0.10 = 6,000).

  4. Prorates the gross overage billing based on the number of days in the partial year (6,000 × 214 ÷ 365 = 3518).

The billable amount is 3,518 USD for the partial year from June 1, 2007, to December 31, 2007.