Create Expense Leases

You can start the expense lease creation from the Lease landing page.

You can start by using one of the following ways:

1. Select New from the Actions menu to open the Create Lease page.

2. Select (+) from the menu.

Create Lease for Expense:

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

Field	Description
Business Unit	Select the business unit of the lease.
Lease Type	Select Expense as the type of lease.
Asset Type	Select the type of asset. Your choices are as follows: Equipment Lease Property Lease
Legal Entity	Select the legal entity.
Lease Number	Enter the lease number.
Lease Start Date	Select the start date of the lease.
Lease End Date	Select the end date of the lease.
Party Name	Select the party name.
Primary Accounting Classification	Select the primary accounting classification. Your choices are as follows: Exempt Finance Lease Operating Lease
Discount Rate Index	Select the discount rate index for the lease.

Select Save and Continue.

Oracle Lease Accounting displays the entire lease contract, and you can include information about the lease in the various tabs.

Overview Tab:

Lease Details Section:

You can add or update the following lease information in the Lease Details section:

Field	Description
Legal Entity	You can retain or change the legal entity.
Lease Name	You can retain or change the lease name.
Party Name	You can retain or change the party name.
Asset Type	You can view the asset type of the lease.
Options Class	You can select whether the options on the lease are at Lease level or Asset level.
Primary Accounting Classification	You can view the accounting classification.
Description	You can enter a description for the lease.
Payment Increase Applicable	Select Yes or No to enable Payment Increase for the lease. You must save the lease if you select Yes. On saving, the Payment Increase Agreements tab is enabled.

In the Overview tab, you can view or add the notes for the lease in the Lease Details section.

1. Select the Note icon.

2. Select New (+) to display the Create Note page.

   The following fields are available as part of the note creation for a lease:

   Field	Description
   Type	Lease Accounting selects the Leasing Activities note type by default. Your choices are as follows: Compliance General Leasing Activities Legal
   Private	Select the checkbox to make the note private and only visible to you.

   Select Save and Close.

   Select OK.

Term Details Section:

You can add the following lease term information in the Term Details section:

Field	Description
Lease Start Date	Retain or change the lease start date.
Lease End Date	Retain or change the lease end date.
Lease Term	Lease Accounting displays the calculated lease term in Years, Months, and Days.
Date Signed On	Enter the signing date of the lease.

Amortizations Section:

You can view or add the following lease amortization information in the Amortizations section:

Field	Description
Amortization Start Date	Select the amortization start date of the lease. The default date is the lease start date. The amortization start date can be after the lease start date.
Amortization End Date	The amortization end date is the same as the lease end date. If there are options on the lease, the amortization end date can differ from the lease end date. In this case, Lease Accounting derives the schedules and runs them between the amortization start and end dates.
Proration Method	You can view Days/Month as the amortization proration method.
Discount Rate Index	Retain or change the discount rate index.
Discount Rate	Lease Accounting displays the discount rate based on the selected discount rate index.
Rate Adder	Enter the rate adder for the amortization, if required. The rate adder gives an extra discount more than the provided discount rate in the discount rate index.

Note: The Discount Rate Index and it's related fields aren't available for Exempt lease classification.

Key Calculations:

Lease accounting calculates and maintains the lease liability and right-of-use balances for every period after the lease amortization start date that you enter for each lease. You can view the high-level description of the calculations as follows:

• Lease Liability: Lease Accounting discounts the cash flows marked as 'Liability' and have a payment due date on and after the lease amortization start date. It uses a rate from the discount rate index selected in the lease to arrive at the lease liability. It calculates the interest amounts using this discount rate for all periods after the lease amortization start date.

• Right-of-Use Finance Lease: When you provide a right-of-use value for a migrated lease, Lease Accounting amortizes on a straight calculation basis over the asset's remaining life after the lease amortization date. If you don't provide this value, Lease Accounting discounts the cash flows marked as 'ROU' to calculate the right-of-use balance using the same logic that you used to calculate lease liability.

• Amortization Expense: Lease Accounting derives it by calculating the right-of-use balance between the lease amortization start date and the expected lease or asset end date.

• Right-of-Use Operating Lease: When you provide a right-of-use value for a migrated lease, Lease Accounting amortizes with the difference between lease expense and interest expense over the remaining life of the lease after the lease amortization start date. If you don't provide this value, Lease Accounting discounts the cash flows marked as 'ROU' to calculate the right-of-use balance using the same logic that you used to calculate lease liability.

• Lease Expense: Lease Expense for a nonmigrated lease is the mean of cash outflows per period. For migrated leases with the right-of-use value provided by you, lease expense is the sum of that value plus the interest expense from that payment. For example, if the right-of-use value is $100,000 and a projected interest expense of $10,000, then the total lease expense is $110,000. Lease Accounting calculates the total lease expense over the remaining life of the asset or lease after the amortization start date.

Document Details Section:

The document details for a lease include who you assign to and who abstracts the lease.

You can view or add the following document information in the Document Details section:

Field	Description
Document Start Date	Select the document start date of the lease. The default date is the lease start date.
Document End Date	Select the document end date of the lease. The default date is the lease end date.
Abstracted By	Select who has abstracted the lease.
Assigned To	Select the lease assignee.

Migration Section:

You can view or add the following migration information in the Migration section:

Field	Description
Migrated Lease	Select the checkbox if it's a migrated lease. Select the right-of-use basis. Your choices are as follows: Gross Net
Migration Date	The date of migration for the lease.

Note:

Mark your lease as 'Migrated' if you're migrating the lease midlife. You can provide the carrying values of right-of-use balances, and Lease Accounting amortizes these balances on a going-forward basis. Lease Accounting calculates the lease liability, and you must provide the right-of-use balances for initial measurement.

Project Section:

You can view or add the following project information in the Project section:

Field	Description
Project Number	Select the project number for the lease.
Expenditure Organization	Select the organization for the expenditure related to the lease.