Key Implementation Steps
You must complete the product setups before using the Oracle Lease Accounting features.
The product setups are as follows:
System Options
The system options definition is the primary step for creating setups for Lease Accounting.
You must set up the Payables Financials options before setting up the system options.
The system options define all major calculation options, namely:
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You must provide the business unit and ledger.
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You must provide the primary and secondary applicable accounting standards. The options are IFRS16 or ASC842. If the primary is IFRS16, then the secondary will be ASC842 if both accounting standards are applicable for reporting and vice versa.
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You must provide the amortization method.
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You must provide a currency conversion type of user, corporate, and such from General Ledger. Lease Accounting uses the conversion type on the lease for foreign exchange payments.
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You must enable auto-numbering for leases and assets.
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You must provide the inventory organization needed for leasing from the inventory master.
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You must provide a GL calendar for calculations. If you don't select the calendar, then Lease Accounting uses the primary ledger's calendar for calculations.
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You must select either Yes or No for Payables Integration.
You must opt for the Payables Integration option in the implementation process to initiate the accounting processes.
Discount Rate Indexes
You can use the discount rate index to capture discount rates required to discount the cash flows.
Lease Accounting uses the discount rates effective on the amortization start date to discount the cash flows on the lease.
You can define multiple discount rate indexes for a business unit. Lease Accounting collects the discount rate indexes into logical buckets such as 20-year leases, 10-year leases, and such.
Lease Accounting associates the discount rate indexes with the lease based on the lease amortization dates. Lease Accounting fetches a particular discount rate from the index and uses it to discount the cash flows.
You must provide the following information to enable a discount rate index:
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You must provide the business unit.
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You must provide the name and description of the index.
The name and description help you group the indexes into a 10-year bucket, 15-year bucket, and so on, or some other logical grouping.
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You must provide a series of discount rates with the nonoverlapping Effective From and Effective To dates.
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You must also provide an effective start date on the header of the index.
Payment Term Templates
You can use the payment term templates for defining payments.
Most of the information needed to define a payment defaults from payment term templates.
The service for the payment term then creates the payment term template.
Lease Accounting creates the payment term template for a business unit. Lease Accounting selects it during the payment creation, which aids in quicker and error-free data entry.
A payment term template requires the following information:
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You must provide the name of the template.
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You must provide a brief description.
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You must provide the payment purpose and type.
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You must provide the frequency of the payment.
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You must provide the supplier's name and site.
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You must provide the accounting classes for Right-of- Use, Lease Liability, Expenses, Gain/Loss, and Foreign Exchange Gain/Loss, among others.
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If required, you must agree to use the balances for Right-of-Use, Liability, and Intercompany.
Descriptive Flexfields
Lease Accounting provides the following sets of descriptive flexfields:
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Manage Lease Accounting Transaction Descriptive Flexfields
- Lease Assets Descriptive Flexfield
- Lease Details Descriptive Flexfield
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Manage Lease Accounting Configuration Descriptive Flexfields
- Payment Increase Templates Descriptive Flexfields
- Payment Templates Descriptive Flexfields
- System Options Descriptive Flexfields
- Manage Subledger Accounting Descriptive Flexfields
Document Sequencing
You must assign a document sequence to the business unit to enable the auto-numbering functionality of leases and assets.