Setting Up Bill Codes and Adjustment Reason Codes
Use the Bill Codes / Adjustments Reasons program (P1512) to set up bill codes and adjustment reason codes that the system uses to identify the AAIs that the system uses to post transactions. You must define the adjustment reason codes both as adjustment reason codes in the Billing Code Entry table (F1512) and as adjustment classifications in UDC table 15/AD.
You can define a bill code or adjustment reason code for a specific property or building. Otherwise, all information is applicable for all properties.
Because of the relationship among AAIs, bill codes, and adjustment reason codes, you must set up AAIs before you set up bill codes and adjustment reason codes. For existing bill codes or adjustment reasons, you can revise information on the Bill Codes/Adjustment Reasons Revisions form; however, you cannot revise the Bill Code or Building fields. To revise either of those values, you must delete the bill code and add a new bill code.
Straight-line Rent Setup for Bill Codes (Release 9.2 Update)
You can use the Bill Codes / Adjustments Reasons program (P1512) to specify the default value for whether bill codes are included in straight-line rent processing. You can create records for the bill code alone, or for both the bill code and building.
When you enter recurring billing information for a lease (P1502), the system attempts to retrieve the default Straight-line Rent Generation flag for the bill codes you enter. The system first attempts to find the default by searching for the bill code and building. If no match is found, the system looks for the bill code alone.
When you run the Generate Straight-line Rent Information program (R15130), the system uses the processing option settings for that program to determine whether to look for the Straight-line Rent Generation flag in the recurring billing records, or to use the bill codes defined in the processing options.
When you add this bill code to a recurring billing record, the processing options on the version of the Lease Information program (P1501) that is specified in the processing options of the Recurring Billing program (P1502) determine whether you can override the Straight-line Rent Generation designation that is defined here.
See Understanding the Straight-line Rent Billing Process for additional information.
Lessee Accounting Setup for Bill Codes (Release 9.2 Update)
You can use the Bill Codes/Adjustments Reasons program (P1512) to specify the default values for these lessee accounting-related fields:
Effect on Lease Liability (UDC 15/LA)
This field is used when setting up recurring billing information, and specifies how the system calculates the lease liability information for recurring payments using this bill code.
Values for this field include:
Guaranteed Residual Value: Payments using bill codes with this value represent the amount expected to be paid against the contracted guaranteed residual value (GRV) of the asset when the lease is complete. You must enter these payments in recurring billing to ensure that the maximum potential liability associated with the asset is reported. GRV amounts are used in calculating the lease liability amortization schedules.
No: Payments using this bill code have no impact on lease liability.
Yes: Payments using this bill code have an impact on lease liability.
Effect on Right of Use Asset (UDC 15/LB)
This field is used when setting up manual billing information, and specifies the types of payments that are typically made before lease commencement.
Values for this field include:
No: Payments using this bill code have no impact on the ROU asset calculation.
Lease Incentive: Payments made with this bill code represent incentives the lessor provides to the lessee on or before lease commencement. These amounts should be entered as negative amounts.
Initial Direct Cost: Payments made with this bill code represent payments associated with costs to secure the lease made prior to lease commencement.
Lease Payment: Payments made with this bill code represent lease payments made prior to lease commencement.
These fields are used to calculate amounts on the amortization schedules and when creating journal entries for leased assets. You can create records for the bill code alone, or for both the bill code and building.
Depending on the value in one of these fields, only certain values can be used in the other field. Use these guidelines when setting lessee accounting values:
Effect on Lease Liability and Effect on ROU Asset can be set to No.
If Effect on Lease Liability is set to Yes or Guaranteed Residual Value, Effect on ROU Asset must be set to No or Lease Payment.
If Effect on ROU Asset is set to Lease Incentive or Initial Direct Cost, Effect on Lease Liability must be set to No.
When you enter manual and recurring billing information for a lease, the system attempts to retrieve the default lessee accounting values for the bill codes you enter. The system first attempts to find the default by searching for the bill code and building. If no match is found, the system looks for the bill code alone.