united states department of transportation leased assets
TRANSCRIPT
United States Department of Transportation
Leased Assets
Introduction
Multi-Org set-upMultiple Set of BooksMultiple Asset Books (Corporate only)Patch Level 11i FA.F or higherExamples are shown in 11.5.8
New with 11i FA.F are the following fields: Lessor
Lessor Site
Payment Account Payment Terms
The Lessor Site determines the Book for the Payment Account field
– N Setup Asset System Leases Lease Details
Creating Lease Details
From the lease agreement determine whether the lease is an operating lease or a capital lease.
A Lease should be Capitalized if the term of the lease exceeds 75% of the economic life of the leased asset or if the minimum lease payments exceeds 90% of the fair market value of the leased asset.
Creating Lease Details (continued)
The Capitalization Test – in accordance with the Financial Accounting Standards Board (FASB) – will capitalize and depreciate leased assets if any one of the following criteria is met: Ownership of the asset transfers
A bargain purchase option exists
Term of lease is more than 75% of economic life of the asset
Present Value of the minimum lease payments exceeds 90% of fair market value of the asset at lease inception
Capitalization Test
The results of the Capitalization Test will display in the Test Result field. If the lease qualifies for capitalization, the Cost to Capitalize field automatically displays the amount that is the lesser of the fair market value of that asset or the present value of the minimum lease payments. This amount is also displayed as the current cost of the asset in the Books window when the asset is added
Capitalization Test (continued)
Attach Payment Schedules
– N Setup Asset System Leases Lease Details
Payment Schedules can be attached in two ways: Either by attaching a previously defined payment schedule or by creating a new one:Note: Once the schedule is attached, it cannot be changed
To create or view a payment schedule: Select the
Payment Schedule button on the Lease Details screen to open the Lease Payments window
Attach Payment Schedules (continued)
In the Lease Payments window, enter a unique Payment Schedule name
The Lease Date must be the 1st of the month
The Present value or the Amount filed must be entered.
Select the View Amortization button in the Lease Payments screen
Creating a Lease Payment Schedule
– N Setup Asset System Leases Lease Payments
– N Setup Asset System Leases Lease Payments View Amortization
Creating an Amortization Schedule
View the payments, interest and reduction in Principal over the life of the lease
– N Setup Asset System Asset Categories
Leased Asset Category
The Category Type must be Lease in order to enable the Lease Number field on the Asset Details screen
– N Assets Asset Workbench
Creating a Leased Asset
In the Fixed Assets window, select New button.
In the Asset Details window, the Asset Category selected will determine the Asset Type, and enable the Lease Number field.
Add the Lease to the Leased Asset
In the Asset Details window: Lease Number
Description (defaults from the Lease Number selected)
Lessor (defaults from the Lease Number selected)
– N Assets Asset Workbench
Enter selection criteria to find the lease payments and select the Find button to open the Export Lease Payments to Payables window
Export Lease Payments to Payables– N Setup Asset System Leases Leases Payments to Payables
Verify the information for each lease payment, including:
Lessor Site Payment Account Payment Terms
Select payments for export, by:
Individually selecting the Export checkbox, or,
Select All Records, from the Edit menu
Export Lease Payments to Payables (continued)
Select the Export button to interface lease payments to Payables.
Export Lease Payments to Payables (continued)
Review the log file for the status of payments exported.
Export Lease Payments to Payables (continued)
Lessons Learned
Security by book does not apply to lease screens without customizing
If lease payments are selected for multiple books, the export will select all payments with a queue of post regardless of Book
Testing found that the Mass Additions form will allow operating leases to be assigned to capital categories
AP requires supplier sites to be pay sites, the Lessor site allows purchasing sites to be selected. (patch available)
