Impair Leases

You can start the lease impairment from the Lease landing page.

You must start the lease impairment process by running the Lease Transactions and Balances Report:

1. Click Generate Lease Transactions and Balances Report from the side panel.

2. Run the report by selecting the Business Unit and Legal Entity for the leases that you want to impair.

3. Open the Lease Transaction and Balances report in the Process Requests from the Lease Accounting Dashboard.

   Note: You must run all the month-end Payables transactions on a lease before impairment of the lease.
4. Search for the lease that you want to impair.
5. Select the lease and click Impair Lease from the Actions menu.

Impair Lease Page:

You need to enter the following information on the Impair Lease page:

Field	Description
Amendment Name	The amendment name of the lease is displayed.
Effective Date	Select the effective date of impairment.
Prepared By	The name of the person impairing the lease.
Notes	Enter notes for the impairment.

Click Save and Continue.

Oracle Lease Accounting displays the lease amendment details.

You can add or update the following lease information for the Amendment Details section:

Field	Description
Amendment Commencement Date	You can view the amendment commencement date.
Date Signed on for Amend	You can view the signed on for amend date.
Notes	Retain or change the impairment notes.
Payment Increase Accounting	You can view the payment increase accounting. The value is No Contingent Increase.
Amendment Name	Retain or change the amendment name.
Prepared By	Retain or change the name of the person impairing the lease.
Type of Amendment	You can view the amendment type. The value is Impairment.
Subtype of Amendment	You can view the amendment subtype. The value is No Scope Change.

The Lease Status is Active, the Lease Version Substatus is Initiated, and the Lease Version Status is Working.

Click Assets.

Select the assets that you want to impair.

You can impair by percentage or amount.

You can add the following impairment information for the Impairments Details section:

Field	Description
Impairment Type	Select the impairment type. Your choices are as follows: Percentage Based Amount Based
Percentage of Asset Value for Impairment	Enter the percentage of the asset value for impairment.
Impairment Percentage	Enter the percentage of the impairment out of the Percentage of Asset Value for Impairment.

Click Save.

Click Validate from the Actions menu.

Click Generate Schedules from the Actions menu.

The Lease Status is Active, the Lease Version Substatus is Initiated, and the Lease Version Status is Validated.

Click Save and Close.

Run the Generate Lease Impairments Report from the side panel for the lease that has been impaired.

Open the Lease Impairments Report in the Process Requests section from the Lease Accounting Dashboard.

You can view the impairment details in the spreadsheet.

Select the impaired lease and click Resume Changes from the Actions menu.

Click Schedules to view the modifications summary.

The Lease Status is Active and the Lease Version Status is Completed.

Click Search for Modification Summary.

Click Activate from the Actions menu.

Click Attach Lease Details Report and Done.

Click the lease number to open and click Schedules to view the Lease Details Report.

The Lease Status is Active and the Lease Version Status is Finalized.

Run the accounting process to reflect the new payment schedules.

Click Create Accounting from the side panel.

Select Lease Accounting from the Subledger Application list.

Select the ledger.

Select the end date.

Select Draft from the Accounting Mode list.

Select All from the Process Events list.

Select Summary from the Report Style list.

Click Submit.

Click Review Journal Entries from the side panel.

Search for the ledger of the impaired lease.

Select Lease Accounting from the Journal Source list.

Select Lease Impairment from the Event Class list.

Select Draft from the Status list.

Note: You can add the field Event Description and enter the lease number to open the lease's journal entries directly.

You can now view the updated accounting classes for the lease payments including the impairment loss accounting class displaying the right-of-use amounts.