Exercise Options

You can exercise an option given on a lease.

You can start by searching for a lease that has the option that you want to exercise.

1. Select the lease.

2. Click Manage Options from the Actions menu to open the Manage Options page.

Manage Options Page:

1. You need to enter the following information on the Manage Options page:

   Field	Description
   Manage Option	Select Exercise Option.
   Option Type	Select the available option, which you want to exercise.
   Effective Date	Select the effective date of the exercise. You must select a date on or before the earliest start date of all the open options.
   Prepared By	Retain or modify the name of the user exercising the option.
   Notes	Enter any relevant information regarding the exercise.

2. Click Save and Continue

Exercise Options:

Options are a crucial part of a lease agreement, both from operations and accounting perspectives. There are many types of options on a contract, such as renewal options or early termination options. Lease administrators routinely monitor upcoming options to make the right decision for the organization.

Lease Accounting provides tools that support the end of lease processing activities of managing options and terminating leases. As leases move through their life and come to the end of the term, lessees need to make decisions related to these activities, and each one may increase or decrease the lease term. For example, exercising a renewal option extends a lease, but exercising a termination option shortens the lease. Lessees can also opt to do nothing and let the lease end naturally. Each choice has an impact on the lease dates, liability balance, and right-of-use balance.

Option	Description
Adjustment	Adjustment Exercise Option.
Allowance	Allowance Exercise Option.
Bargain Purchase	Bargain Purchase Exercise Option.
Construction Warranty	Construction Warranty Exercise Option.
Early Termination	Early Termination Exercise Option.
Expansion	Expansion Exercise Option.
Fair Market Value	Fair Market Value Exercise Option.
Holdover	Holdover Exercise Option.
Purchase	Purchase Exercise Option.
Renewal	Renewal Exercise Option.
Residual	Residual Exercise Option.

Oracle Lease Accounting displays the lease's options tab and you can select and exercise the option. The lease is currently in Working version status and Active lease status.

Click Exercise and Review to initiate the exercise process.

The lease is in a new version. You can save or discard the changes that you have made.

Click Validate to validate the changes to the lease.

Click Generate Schedules to update the schedules.

Click Discard if you want to abandon the process.

Click Activate to activate the lease. The lease moves to Finalized version status and Active lease status.

Click Attach Lease Details Report.

Click Done.

You can view the older versions of the lease in the History tab.

Option exercise results in an option payment generated by the application. Lease Accounting uses the balances on the exercise date on the option to generate the balances on the newly created payment. This newly created payment can result in AP invoices.

Option exercise doesn't lead to scope changes.