Add One-Time Payments

Explanation

This activity is used to enter payments such as exercise price of an option to purchase the underlying lease asset, amounts payable under residual value guarantee in accordance with the lease agreement or any expected termination penalties to be able to apply them in the lease accounting process. These payments are known as One-Time Payments in the lease accounting process.

Prerequisites

In order to enter One-Time Payment in the Terms and Conditions sub tab using the Terms and Conditions dialog box, the following information must have been completed:

•  Information should be entered in the header and the General tab of the Lease Accounting Contract window.
•  It is optional to have an amortization schedule created in the Amortization Schedule tab of the Lease Accounting Contract window. If the One-Time Payment is added as a modification to the lease contract it is required to have an amortization schedule in the aforementioned tab.
•  Status of the Lease Accounting Contract window should be in the status Preliminary.
•  Terms and conditions line should exist in the Category, Standard Terms in the Terms and Conditions sub tab.

System Effects

As a result of this activity, One-Time Payment is available for the lease accounting process.

Window

Lease Accounting Contract
Lease Contract Modification Detail

Related Window Descriptions

Lease Terms and Conditions
Lease Accounting Contract
Lease Accounting Contract/General
Lease Contract Modification Detail

Procedure

Use the following procedure to enter One-Time Payment for a lease contract:

1. Open Terms and Conditions sub tab in Lease Accounting Contract/General tab and create a new record to open Terms and Conditions dialog box.
2. Enter a description for the terms and conditions line in the Description field.
3. In the Category list, select the category One-Time Payment.
   Note: Category of the Terms and Conditions represents payments that are agreed upon with the lessor in the lease agreement and that are used in the calculation of present value of minimum lease payments.
4. Enter the amount of the One-Time Payment in the Lease Amount field.
5. Enter the date on which the One-Time Payment to be paid in the Payment Start Date field. Note: This date should be within the date range of payments registered in the Category, Standard Terms. If the Payment Start Date of One-Time Payments does not match with a specific Payments Due Date in the schedule, those One-Time Payments are included in the next possible payments due date in the Amortization Schedule.
6. Click OK to save information.

Note: The same procedure can be carried out for multiple contracts from Lease Accounting Contracts window by selecting RMB option Modify Lease Contract.