Payoff [U0103]: Payoff, Payoff Reversal

The Payoff functions, Payoff and Payoff Reversal, process and reverse payoffs on leases or assets attached to leases. In LeasePak, a payoff allows the lessee to fulfill financial obligations on the lease (or on the portion pertaining to one of its assets) and purchase the leased asset(s). These functions are options of the Payoff update, which can be accessed through the main LeasePak Updates menu, Payoff option, or by entering U0103 into Fast Menu <F2>.

Additionally, the Payoff update has been modified to create and/or append to a centrally located scratch file for invoice generation. Field data will be stored in the historical Lease table (RPS).

This update processes payoffs according to various switch settings within the Payoff Customization option of the Portfolio [U0212] update. Based on those settings, the Payoff update will process payoffs according to the customization of those fields.

Contents

• Payoff
  

  • Method, Effective Date
    • Lease Payoff
    • Asset Payoff
      
      
• Reverse Payments to Effective Date
  
  
• Sales Tax
  
  
• Payoff Amounts
  
  
• Apply Payoff or Place in Suspense
  
  
• Overage/Shortage
  • Overage
  • Shortage
    
    
• Asset Payoff - Payment Reschedule
  • Confirm Payment Schedule
    
    
    

• Payoff Reversal

  • Reverse Lease Payoff
    
    
  • Reverse Asset Payoff
    • Payment Reschedule
    • Confirm Payment Schedule

Payoff

This option pays off an entire lease or an asset on a lease with more than one asset.

Paying off Leases

For a lease payoff, all outstanding asset and commission fee accounts payable must be disbursed. Use the New Lease update [U0101], Disburse Check option to clear these payables.

Paying off Assets

In order to perform an asset payoff, the asset to be paid off must not be the only asset attached to the lease. If only one asset is attached to the lease, perform a lease payoff.

If an Automatic Lease Extension record has been set up for the lease, performing an asset payoff will produce a message warning the user that the Automatic Lease Extension record exists and will become obsolete if it is not adjusted following the asset payoff. Obsolete Automatic Lease Extension records are not used to put a lease into Automatic Lease Extension. Instead, the lease number will appear on the Automatic Lease Extension Exception report [U0430A] and the extension, if desired, will need to be performed manually. To avoid this, use the Lease Extension update [U0108], Automatic Lease Extension option to update the Automatic Lease Extension record immediately following an asset payoff. To perform a manual lease extension, use the Lease Extension update, Lease Extension option.

A Payoff may be made to an asset that is attached to a lease with a MTM (month to month) status.

If the user has purchased and is using the Notes Payable module, a warning message will be displayed if an active note is attached to the asset.

To dispose of an off lease asset, use the Sale of Asset in Inventory option of the Payoff update.

This screen is used to select Payoff from the Payoff options menu.

This screen is used to select the lease or asset to be paid off.

When a lease or asset contains a Suspense balance item, a warning message will notify the user of the suspense balance amount prior to processing the Payoff/Termination. This warning message will not be displayed for batch processes or when a Suspense balance is added and/or changed via the G/L Adjustments [U0121] update.

• LEASE
  This is the lease number to be paid off. Leave this field blank if paying off an asset.
  
  
• ASSET
  This is the asset number to be paid off. It must not be the only asset attached to its lease. Leave this field blank if paying off a lease.
  

Method, Effective Date

• Lease Payoff
• Asset Payoff

Lease Payoff

This is the first screen of a lease payoff. It is used to specify parameters for the payoff. Sales tax information is displayed only if sales tax should be charged on the sale, as determined by the payoff section of the Lease Form update [U0721].

If a payoff quote was established for the lease or asset using the Payoff Quote update [U0213], parameters from the Payoff Quote (RPD) file are displayed on this screen. The quote’s parameters may be changed.

For asset payoffs, the accrued to date for the lease is used as EFFECTIVE DATE of the payoff. Refer to the Accrual section of the Lease Inquiry report [R0905] for the accrued to date. It is possible for the lessor to continue depreciating the asset beyond the payoff effective date. This is accomplished by entering a different date in ASSET DISPOSITION DATE.

For assets paid off from interest bearing loans, the outstanding principal for the asset must not exceed the unaccrued principal for the lease.

The asset status code of paid-off assets is automatically changed to NSLD (not available - sold).

• PAYOFF METHOD
  PAYOFF METHOD defaults to the method specified on the Payoff Quote (RPD) file. If no Payoff Quote exists, PAYOFF METHOD defaults to the method on the lease form, as established on the Lease Form update [U0721]. The method may be changed to another valid method. Click on the Help arrow for a list of valid payoff methods. If paying off an operating lease, the PAYOFF METHOD defaults to OPR and may not be changed.

  LeasePak calculates the income of INV, OPR and PRN type methods based on the Payoff Customization switches in the Portfolio [U0212] update.

  The matrix below shows which payoff methods may be used for each lease type.
  

Lease Type	Payoff Methods	Termination Methods
Precomputed	CF3, EBV, FIX, G12, INV, NPV, PR, PRN, PV2, PVS, PVT, R78,RES, RV, SB, TAX, WO	EBV, G12, INV, NONE, PV2, RV, TAX, WO
Simple Interest	EBV, PRN	NONE
Operating	OPR	INV, NONE
IBL	IB	IB

Note: LeasePak now allows the Rule of 12/78th to be used as a pay-off method for pre-computed, AAPR/RAPR accrual methods leases only.

Refer to the Calculations document for more information on payoff methods.

Refer to the Portfolio update, Payoff Customizations [U0212] for more information on payoff control switches.

Refer also to the Custom General, Miscellaneous Customizations option [U0712].

• EFFECTIVE DATE
  For asset payoff, the effective date is defaulted to the accrued to date of the lease and may not be changed.
  
  For lease payoff, enter or change the effective date of the payoff in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. For a lease payoff, the EFFECTIVE DATE may be back- dated to any date in the past as long as all lease payments due after the EFFECTIVE DATE are outstanding (unpaid) on the Accounts Receivable (RAR) file. LeasePak automatically reverses the lease back to the EFFECTIVE DATE entered. This means that the lease is reversed to the first payment due date on or before the EFFECTIVE DATE. For example, a lease with a payment due date of the first of the month and a payoff with an EFFECTIVE DATE of 11/30 reverses to 11/1.

  Note: Use tax is calculated based on the current tax payment code and/or location of the asset(s). Incorrect use tax may be calculated if the location and/or tax payment code is changed during the period for which the accrual reversal process is performed.

The EFFECTIVE DATE may be set to a future date up to the date for which income is accrued (accrued to date). Generally, this date is the next payment due date. LeasePak processes all unpaid invoices up to and including the EFFECTIVE DATE through the clearing account.

For interest bearing loans, the payoff EFFECTIVE DATE must be on or after the last payment effective date and on or before the accrued to date. The asset payoff EFFECTIVE DATE must be on the accrued to date.

For IBL's with A type behavior, LeasePak allows for the Payoff Effective Date to be greater than the Accrued to Date (up to a month). Additionally, IBL type leases must have the Capitalized Interest field in Applications [U0801] and New Lease [U0101] set to 'N'. All IBL accrual methods are supported.

The Payoff will be declined if the Last Accrued to Date plus one month is less than the Payoff Effective Date. LeasePak will display an exception message.

Example

Current Accrued to Date	10/1/01
Accrual Deferral Day	6
Next Accrual	EOP on 10/07/01
New Accrued to Date on 10/07/01	Next Payment Due Date 11/01/01
Payoff Effective Date	11/05/01

Current Accrued to Date (10/1/01) + one month = 11/01/01 11/01/01 is less then Payoff Effective Date = 11/5/01
The following exception message will be displayed: "Effective date must not be after: 11/01/01"

If the Last Accrued to Date is less than Payoff Effective Date but Last Accrued to Date plus one-month is more than Payoff Effective Date, LeasePak will calculate the additional interest.

Example

Current Accrued to Date	10/1/01
Accrual Deferral Days	6
Next Accrual	EOP on 10/07/01
New Accrued to Date on 10/07/01	Next Payment Due Date 11/01/01
Current Date	10/01/01-11/01/01 (between Last Accrued to Date and next Last Accrued to Date)
Payoff Effective Date	10//06/01

Current Interest Outstanding = Additional Interest (Interest calculated for 7 days of October) + Current Payments Outstanding (Interest accrued until 10/1/01)

Changing the EFFECTIVE DATE of a payoff for interest bearing loans has no effect on the BASE PAYOFF calculation. However, it does affect interest calculations:

Lease Payoff
PMTS OUTSTD shows a different interest calculation.

Asset Payoff
Subsequent interest calculations for the lease reflect the new principal based on the EFFECTIVE DATE entered.

• SUSPENSE ITEM
  Enter or change the suspense item which is to be used for the payoff, if applicable. Click on the HELP arrow for a list of available SUSPENSE items. If LeasePak’s session assignment is used and no items from suspense are assigned to the operator, then this field may not be accessed.
  
  
• PAYOFF SOURCE
  Enter or change the payoff source. Use Help for a list of valid sources. PAYOFF SOURCE is informational only. Codes are established through the Custom Codes update [U0722] under code SRC.
  
  
• SOURCE NAME
  The Source Name for the lease is defaulted based on the Payoff Source entered and may be modified. The Vendor Name, Customer Name and/or the Insurance Agent Name will default from the lease when the Payoff Source Code selected begins with a C*** (customer), D*** (vendor/dealer) or I*** (insurance agent). Payoff Source Codes are defined in the Custom Codes [U0722] update.
  
  
• FMV
  Enter or change the fair market value. FMV is used only for calculations in the RV (realized value) payoff method.
  
  When an OPER asset is terminated, a calculated FMV will be displayed on the screen and cannot be changed.
  
  
• PAYOFF RATING
  Enter or change the payoff rating. Use ‘HELP’ for a list of valid payoff ratings. PAYOFF RATING is informational only. Payoff rating codes are established through the Custom Codes update [U0722] under code RAT.
  
  
• SALES PARTY
  Enter R if the asset was sold to a related party (e.g., a sale from a captive to its parent) or U if unrelated (sale to an outside third-party).
  
  
• ASSET DISPOSITION DATE
  Defaults to match payoff effective date in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. It may be overridden with a later date if lessor intends to continue depreciating the asset beyond the payoff date. Cannot be later than fiscal year end following payoff effective date.
  
  
• EXCLUDE PAST DUE PAYMENT AND ASSESSMENT (Y/N)
  This switch will appear when the Off Lease Billing module is purchased. This field will work in conjunction the with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update.
  
  Enter Y for all past due payment and assessments to be excluded from the Payoff Quote. This will allow the user to override the Base Amount and the outstanding Payment and/or assessment amount. Enter N for all past due payment and assessments to be included in the Payoff.
  

Asset Payoff

This is the first screen for an asset payoff. It is used to specify parameters for the payoff of an asset. Sales tax information is displayed only if sales tax should be charged on the sale, as determined by the payoff section of the Lease Form update [U0721].

If a payoff quote was established for the lease or asset using the Payoff Quote update [U0213], parameters from the Payoff Quote (RPD) file are displayed on this screen. The quote’s parameters may be changed.

For asset payoffs, the accrued to date for the lease is used as EFFECTIVE DATE of the payoff. Refer to the Accrual section of the Lease Inquiry report [R0905] for the accrued to date. It is possible for the lessor to continue depreciating the asset beyond the payoff effective date. This is accomplished by entering a different date in ASSET DISPOSITION DATE.

Additionally, LeasePak supports the NPV Payoff Method for Asset Payoffs on a lease with an irregular payment schedule on an *APR accrual method. The Asset Percentage Calc Method (A/P) switch in Miscellaneous Customization option of the Custom General update [U0712] must be set to ‘A’ for Payoff to allow the NPV method to be entered as a Payoff Method. The Payoff effective date will be the default for the accrual to date and cannot be changed.

For assets paid off from interest bearing loans, the outstanding principal for the asset must not exceed the unaccrued principal for the lease.

The asset status code of paid-off assets is automatically changed to NSLD (not available - sold).

• PAYOFF METHOD
  PAYOFF METHOD defaults to the method specified on the Payoff Quote (RPD) file. If no Payoff Quote exists, PAYOFF METHOD defaults to the method on the lease form, as established on the Lease Form update [U0721]. The method may be changed to another valid method. Click on the Help arrow for a list of valid payoff methods. If paying off an operating lease, the PAYOFF METHOD defaults to OPR and may not be changed. The matrix below shows which payoff methods may be used for each lease type.
  
  

  Lease Type	Payoff Methods	Termination Methods
  Precomputed	CF3, EBV, FIX, G12, INV, NPV, PR, PRN, PV2, PVS, PVT, RES, RV, SB, TAX, WO	EBV, G12, INV, NONE, PV2, RV, TAX, WO
  Simple Interest	EBV, PRN	NONE
  Operating	OPR	INV, NONE
  IBL	IB	IB

Refer to the Calculations document for more information on payoff methods.

Refer to the Portfolio update, Payoff Customizations [U0212] for more information on payoff control switches.

Refer also to the Custom General, Miscellaneous Customizations option [U0712].

• EFFECTIVE DATE
  For asset payoff, the effective date is defaulted to the accrued to date of the lease and may not be changed.
  
  For lease payoff, enter or change the effective date of the payoff in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. For a lease payoff, the EFFECTIVE DATE may be back- dated to any date in the past as long as all lease payments due after the EFFECTIVE DATE are outstanding (unpaid) on the Accounts Receivable (RAR) file. LeasePak automatically reverses the lease back to the EFFECTIVE DATE entered. This means that the lease is reversed to the first payment due date on or before the EFFECTIVE DATE. For example, a lease with a payment due date of the first of the month and a payoff with an EFFECTIVE DATE of 11/30 reverses to 11/1.

  Note: Use tax is calculated based on the current tax payment code and/or location of the asset(s). Incorrect use tax may be calculated if the location and/or tax payment code is changed during the period for which the accrual reversal process is performed.

The EFFECTIVE DATE may be set to a future date up to the date for which income is accrued (accrued to date). Generally, this date is the next payment due date. LeasePak processes all unpaid invoices up to and including the EFFECTIVE DATE through the clearing account.

For interest bearing loans, the payoff EFFECTIVE DATE must be on or after the last payment effective date and on or before the accrued to date. The asset payoff EFFECTIVE DATE must be on the accrued to date.

Changing the EFFECTIVE DATE of a payoff for interest bearing loans has no effect on the BASE PAYOFF calculation. However, it does affect interest calculations:

Lease Payoff
PMTS OUTSTD shows a different interest calculation.

Asset Payoff
Subsequent interest calculations for the lease reflect the new principal based on the EFFECTIVE DATE entered.

• SUSPENSE ITEM
  Enter or change the suspense item which is to be used for the payoff, if applicable. Click on the HELP arrow for a list of available SUSPENSE items. If LeasePak’s session assignment is used and no items from suspense are assigned to the operator, then this field may not be accessed.
  
  
• PAYOFF SOURCE
  Enter or change the payoff source. Use Help for a list of valid sources. PAYOFF SOURCE is informational only. Codes are established through the Custom Codes update [U0722] under code SRC.
  
  
• FMV
  Enter or change the fair market value. FMV is used only for calculations in the RV (realized value) payoff method.
  
  When an OPER asset is terminated, a calculated FMV will be displayed on the screen and cannot be changed.
  
  
• PAYOFF RATING
  Enter or change the payoff rating. Use ‘HELP’ for a list of valid payoff ratings. PAYOFF RATING is informational only. Payoff rating codes are established through the Custom Codes update [U0722] under code RAT.
  
  
• SALES PARTY
  Enter R if the asset was sold to a related party (e.g., a sale from a captive to its parent) or U if unrelated (sale to an outside third-party).
  
  
• ASSET DISPOSITION DATE
  Defaults to match payoff effective date in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. May be overridden with a later date if lessor intends to continue depreciating the asset beyond the payoff date. Cannot be later than fiscal year end following payoff effective date.
  
  
• CANCEL CREDIT LIFE INSURANCE 1
  The default value of this field is N, stating that the Credit Life Insurance has not been canceled.
  
  Enter Y if the Credit Life Insurance has been canceled, the corresponding unearned amount will be zero and the unearned amount will need to be reversed before a payoff is made.
  
  If the canceled unearned amount is not equal to the asset payoff amount, a warning message will be received.
  
  
• CANCEL CREDIT LIFE INSURANCE 2
  The default value of this field is N, stating that the Credit Life Insurance has not been canceled.
  
  Enter Y if the Credit Life Insurance has been canceled, the corresponding unearned amount will be zero and the unearned amount will need to be reversed before a payoff is made.
  
  If the canceled unearned amount is not equal to the asset payoff amount, a warning message will be received.
  
  
• CANCEL CREDIT DISABILITY INSURANCE 1
  The default value of this field is N, stating that the Credit Disability Insurance has not been canceled.
  
  Enter Y if the Credit Disability Insurance has been canceled, the corresponding unearned amount will be zero and the unearned amount will need to be reversed before a payoff is made.
  
  If the canceled unearned amount is not equal to the asset payoff amount, a warning message will be received.
  
  
• CANCEL CREDIT DISABILITY INSURANCE 2
  The default value of this field is N, stating that the Credit Disability Insurance has not been canceled
  
  Enter Y if the Credit Disability Insurance has been canceled, the corresponding unearned amount will be zero and the unearned amount will need to be reversed before a payoff is made.
  
  If the canceled unearned amount is not equal to the asset payoff amount, a warning message will be received.
  
  
• CANCEL WARRANTY INSURANCE
  The default value of this field is N, stating that the Warranty Insurance has not been canceled
  
  Enter Y if the Warranty Insurance has been canceled, the corresponding unearned amount will be zero and the unearned amount will need to be reversed before a payoff is made.
  
  If the canceled unearned amount is not equal to the asset payoff amount, a warning message will be received.

  Note: Refer to the Lease Payoff section of the Payoff update [U0103] for further information regarding these fields.

  The Lease Form update [U0721] sets the parameters for REBATES.

Reverse Payments to Effective Date

This screen is used for both lease and asset payoffs. It appears for all accrual types except Interest Bearing Loans (IBLs) and gives the user the option to reverse all payments to the EFFECTIVE DATE specified for the payoff.

• PAYMENTS HAVE BEEN MADE TO INVOICES WITH A PAYMENT DUE DATE AFTER THE EFFECTIVE DATE. DO YOU WISH TO REVERSE THOSE PAYMENTS (Y/N)
  Enter Y if all payments made with a due date after the effective date are to be reversed. Enter N, if the payments are not to be reversed during the Payoff.
  
  If the payments are not to be reversed, the effective date will need to be changed accordingly.
  
  
• BANK CODE FOR PAYMENT REVERSAL
  This field appears if the Multiple Banks module is purchased. Enter the Bank Code that pertains to the lease being paid off. If the Multiple Banks module has not been purchased, all reversals will be applied to the Cash account (LeasePak G/L account 1001).

  Note: If a Bank Code is not entered , LeasePak will give a warning message: ‘Bank Code is blank. Original Bank Code will be used.’

Sales Tax on Payoff

This screen is used for both lease and asset payoffs. For asset payoffs, only one asset - the one being paid off - will appear in the asset list. It is used to specify sales tax requirements for payoffs. This screen is displayed if sales tax should be charged on the sale, as determined by the lease form code for the lease. (Refer to the Lease Form update [U0721].)

If a payoff quote is established for the lease or asset using the Payoff Quote update [U0213], information from the Payoff Quote (RPD) file is displayed on this screen. The quote’s payoff parameters may be changed.

• BASE TAXABLE AMOUNT DEFAULT
  Enter a code for how to determine the base taxable amount for each asset on the payoff. Leave blank if no base taxable amount should be defaulted. Valid codes are:

  PAY The asset’s percentage of the total lease determines the asset’s portion of TAXABLE AMOUNT. BASE TAXABLE AMOUNT defaults to the base payoff amount and may be changed.

  RES The asset’s residual value is its default TAXABLE AMOUNT. BASE TAXABLE AMOUNT defaults to the total residual value and may be changed.

FMV TAXABLE AMOUNT is the fair market value as entered by the user for each asset. Note that this option will not default TAXABLE AMOUNT for each asset, nor will a BASE TAXABLE AMOUNT be defaulted.

• BASE TAXABLE AMOUNT
  The amount defaults based on the code entered above and may be changed.
  
  If the lease is subject to value added tax, the Base Taxable Amount is the amount subject to VAT. For example, when the UPFRONT VALUE ADDED TAX switch is set to Y for the portfolio, the Base Taxable Amount may be principal only.
  
  
• SALE LOCATION/RATE DEFAULTS
  This field may be used as a quick way to enter sale location and rate information for each asset in the scrolled area. Actual sale location and rate for individual assets may then be changed, if necessary. Therefore, if one of the following methods approximates the conditions of the sale, use it to default information and then change pieces of information as needed. Leave this field blank if no locations or rates are to be defaulted. Valid codes are:

  CUR Current state, county, and city locations and use tax rates for the assets should be used as the defaults
  A specific state, county, or city rate can later be changed using the LOCATION DEFAULT and RATE DEFAULT fields. For example, if assets are being sold in their current location, but the applicable state tax rate on a sale is different from the defaulted state use tax rate, enter the STATE LOCATION DEFAULT and the STATE RATE DEFAULT. This automatically changes the defaulted state rate for all assets in that state. All other information is unaffected. This process may be repeated for multiple adjustments to the information in the scrolled area.

  NEW Existing locations and rates for each asset should all be overridden with a single user-specified state, county, and city location and rate. The location and rate is specified through the following default location and rate fields. (Any of the state, county, and city locations and rates may be entered as default information.)

LPQ The last saved payoff quote’s state, county, and city locations and use tax rates should be used as defaults for each asset in the scrolled area. This code is valid if a payoff quote exists.

• STATE LOCATION DEFAULT
  Enter the 2 character post office abbreviation of the state of the sale. The state must be on the Location file. When the state is entered, state use tax rate is displayed as the STATE RATE DEFAULT.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the state location of the one entered in this field. The state sales tax rate for the assets is also defaulted at this time with the STATE RATE DEFAULT.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with STATE RATE DEFAULT to change the state sales tax rates for all assets in the state to the STATE RATE DEFAULT.
  
  
• STATE RATE DEFAULT
  When the state is entered, the state rate is displayed and may be changed.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the state rate entered in this field.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with STATE LOCATION DEFAULT to change the state sales tax rates for all assets in the state to the rate entered in this field.
  
  
• COUNTY LOCATION DEFAULT
  Enter the code of the county of the sale. The county must be on the Location file. COUNTY LOCATION DEFAULT may not be entered if the STATE LOCATION DEFAULT is a Canadian province.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the county location of the one entered in this field. The county sales tax rate for the assets may also be defaulted at this time.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with COUNTY RATE DEFAULT to change the county sales tax rates for all assets in the county to the COUNTY RATE DEFAULT.

  Note: In order to handle county level taxes for Australian states, a standalone conversion program is required.

• COUNTY RATE DEFAULT
  When the state and county are entered, the county rate on file is displayed and may be changed. The COUNTY RATE DEFAULT may not be entered if the STATE LOCATION DEFAULT is a Canadian province.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the county rate entered in this field.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with COUNTY LOCATION DEFAULT to change the county sales tax rates for all assets in the county to the rate entered in this field.
  
  
• CITY LOCATION DEFAULT
  Enter the code of the city of the sale. The city must be on the Location file.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the city location entered in this field. The city sales tax rate for the assets may also be defaulted at this time.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with CITY RATE DEFAULT to change the city sales tax rates for all assets in the city to the CITY RATE DEFAULT.
  
  
• CITY RATE DEFAULT
  When the state, county (except for Canadian provinces), and city are entered, the existing city rate on file is displayed and may be changed.
  
  If the SALE LOCATION/RATE DEFAULTS code is NEW, all assets in the scrolled area are defaulted with the city rate entered in this field.
  
  If the SALE LOCATION/RATE DEFAULTS code is CUR, this field is used with CITY LOCATION DEFAULT to change the city sales tax rates for all assets in the city to the rate entered in this field.
  
  
• ASSET (scrolled area)
  The assets number(s) to be sold are displayed and may not be changed.
  
  
• ST (scrolled area)
  Enter or change the two-character post office abbreviation of the state of the sale.
  
  
• ST RATE (scrolled area)
  Enter or change the state sales tax rate to be used to calculate the tax on the sale of this asset. ST RATE may be zero.
  
  
• CNTY (scrolled area)
  Enter or change the code for the county of the sale. CNTY may not be entered if the state entered is a Canadian province.
  
  
• CNTY RATE (scrolled area)
  Enter or change the county sales tax rate to be used to calculate the tax on the sale of this asset. CNTY RATE may be zero. CNTY RATE may not be entered if the state entered is a Canadian province.
  
  
• CITY (scrolled area)
  Enter or change the code for the city of the sale.
  
  
• CITY RATE (scrolled area)
  Enter or change the city sales tax rate to be used to calculate the tax on the sale of this asset. CITY RATE may be zero, if so desired.
  
  
• TAXABLE AMT (scrolled area)
  Enter or change the amount upon which the sales tax should be based. The total TAXABLE AMT for all assets is displayed at the bottom of the screen. The total TAXABLE AMT must equal the BASE TAXABLE AMOUNT when all changes have been completed.
  
  
• SALES TAX (scrolled area)
  SALES TAX is calculated as follows:

  TAXABLE AMT
  * (STATE RATE + COUNTY RATE + CITY RATE)

  Total SALES TAX for all assets is displayed at the bottom of the screen.

Payoff Amounts

This screen is used for both lease and asset payoffs, with the following exceptions:

• SECURITY DEPOSIT
  On asset payoffs, this field is not accessible.
  
  
• CHECK NUMBER
  This field appears only on lease payoffs.
  
  
• BATCH NUM
  This field appears only on lease payoffs.

The screen is used to record the payoff amount received and additional charges.

• CHECK AMOUNT
  Enter the amount received for the payoff. CHECK AMOUNT is included in TOTAL REC’D.

  Note: When the Cash Control module is purchased, LeasePak will not allow a payoff to be made with a suspense item.

• SECURITY DEP
  The security deposit for the lease is displayed and included in TOTAL REC’D. For asset payoffs only, this amount may be reduced.
  
  
• SUSPENSE AMT
  If a SUSPENSE ITEM was entered, the remaining balance of the suspense item is displayed. These funds are used as part of the payoff amount received and are included in TOTAL REC’D.
  
  
• REV PMT AMT
  If the reverse payment switch has been set to Y, this field will default the total for REVERSED PAYMENT AMOUNT. These funds are used as part of the payoff amount received and are included in TOTAL REC’D.
  
  
• BANK CODE
  This field will appear if the Multiple Banks module has been purchased. It allows the user to specify which bank should be used to process the payoff. The default is 125; valid entries are 1 or 125-144. Help is available.
  
  If invoices exist that are partially paid, the bank code used in the first partial payment will default.
  
  If a suspense item is used, the bank code from that suspense item will default.
  
  
• CHECK NUMBER
  If the Cash Control module is purchased and cash is received for the Payoff, a CHECK NUMBER must be entered.
  
  LeasePak will store the check number in the Check Payment Master (RPM) file and Check Payment Detail (RPN) file. A trace reference will be created based on the Payment Origination code: ‘LPBK’ for Book Lease [U0101]. The trace reference will be displayed in the Cash Control Payment History [R0926] report.
  
  
• BASE PAYOFF
  The base payoff for the value of the lease or asset, as calculated using the PAYOFF METHOD and the EFFECTIVE DATE, is displayed.
  
  
• PMTS OUTSTD
  The amount of lease payments outstanding on or before the EFFECTIVE DATE is calculated and displayed.
  
  
• ASSM OUTSTD
  The amount of all assessments outstanding, regardless of the EFFECTIVE DATE, is displayed. Use tax for the lease payments due on or before the EFFECTIVE DATE is included in this amount.
  
  
• SALES TAX
  Tax on sale as specified on screen 2 is displayed. The SALES TAX amount may not be changed.
  
  If the lease is subject to value added tax, VAT on the Base Taxable Amount, Additional Interest and Fee/Penalty is displayed.
  
  
• ADDL INTEREST
  Any additional interest required by the payoff method is displayed and may be modified.
  
  
• FEE/PENALTY
  Fees or penalties charged to the lessee on the payoff are displayed and may be modified. FEE/PENALTY is calculated according to the information on the lease agreement. (Refer to the payoff section of the Lease Form update [U0721].)
  
  
• ITC RECAPTURE
  The amount of Investment Tax Credit to be recaptured upon payoff, if any, is displayed and may be modified. LeasePak adds the ITC recapture into the payoff amount only if so directed by the lease agreement. (Refer to the payoff section of the Lease Form update [U0721].)
  
  ITC recapture for tax purposes is always automatically calculated and performed by the system. The amount entered on this payoff screen represents an extra fee to be charged to the lessee.
  
  
• LIF 1 REBATE
  The total IDR7 - Credit Life Insurance 1 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• LIF 2 REBATE
  The total IDR8 - Credit Life Insurance 2 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• DIS 1 REBATE
  The total IDR9 - Credit Disability 1 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• DIS 2 REBATE
  The total IDRA - Credit Disability Insurance 2 amount for the lease is displayed, when the Vehicle Finance module is purchased.

  Note: The Rebate amount of the Credit Life Insurance 1/2, Credit Disability 1/2 may be used to reduce the payoff amount. The additional G/L accounts added calculate the difference between the rebate amount and the existing unearned amount.

  If the Insurance Unearned is to zero because of the canceled insurance, than the rebate amount must be zero in the Rebate screen of the Lease Form Code update [U0721]

  The Auto Charge Off [U0440] update, displays IDC/IDR totals for Payoff.

• BATCH NUMBER
  When the Cash Control module is purchased, LeasePak will display the Batch Number associated with the lease.
  
  
• QUOTE BASE PAYOFF
  This field appears if the Off Lease Billing module is purchased and works in conjunction with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update.
  
  The Base Payoff from the Payoff Quote is displayed if the quote was saved. This field may be changed.
  
  
• TOTAL REC’D
  The sum of CHECK AMOUNT, SECURITY DEP and SUSPENSE AMT is displayed.
  
  
• TOTAL PAYOFF
  The sum of all the payoff components is displayed.

  BASE PAYOFF
  + PMTS OUTSTD
  + ASSM OUTSTD
  + SALES TAX
  + ADDL INTEREST
  + FEE/PENALTY+ ITC RECAPTURE

Apply Payoff or Place in Suspense

This screen is used for both lease and asset payoffs. It is used to apply the payoff receivables or place the total amount received into suspense.

Note: if the amount in TOTAL RECD is equal to the amount in TOTAL PAYOFF, this is the last screen of a lease payoff. For a lease payoff with no overage or shortage, clicking on OK from this screen processes the payoff.

• SELECT ONE OPTION

  A APPLY PAYOFF

  B PLACE TOTAL AMOUNT RECEIVED INTO SUSPENSE
  The total amount received is placed into suspense.

  COMMENTS:
  Enter comments for suspense item.

Payoff Overage/Shortage

• Shortage

Overage

This screen is used for both lease and asset payoffs. It is used to indicate the distribution of the payoff overage. It appears if the TOTAL REC’D is greater than the TOTAL PAYOFF. The overage is displayed on the screen and is reduced by each amount that is entered.

The overage must be zero before the lease is paid off. That is, the amounts entered for GAIN ON SALE, PLACE IN SUSPENSE and REFUND CHECK must total the original PAYOFF OVERAGE.

Note: for a lease payoff with an overage, this is the last screen. Clicking on OK from this screen processes the lease payoff.

• PAYOFF OVERAGE
  
  
• GAIN ON SALE
  Enter the amount of the overage that is to be retained and recorded as a gain on sale. It must be less than or equal to PAYOFF OVERAGE.
  
  
• PLACE IN SUSPENSE
  Enter the amount of the overage that is to be placed into suspense to be researched and processed later. The amount entered must be less than or equal to the PAYOFF OVERAGE. If the Multiple Banks module has been purchased, the bank code entered for the payment will be used to process the suspense item. The bank code on this screen is used for processing a refund check.
  
  
• COMMENTS
  If an amount is placed in suspense, comments to be associated with that suspense item may be entered.
  
  
• REFUND CHECK
  Enter the amount of the overage that is to be returned to the lessee through a cashier’s check. The amount entered must be less than or equal to the PAYOFF OVERAGE.
  
  
• BANK CODE
  This field will appear if the Multiple Banks module has been purchased. It allows the user to specify which bank should be used to process the refund. It is not used in the processing of a suspense item (if specified). The default bank code is 126; valid entries are 1 or 125-144. Help is available.
  
  
• REFERENCE
  If an amount in REFUND CHECK is entered, a reference associated with the check may be entered.
  
  
• BANK CODE
  This field will appear if the Multiple Banks module has been purchased. It allows the user to specify which bank should be used to process the refund. It is not used in the processing of a suspense item (if specified). The default bank code is 126; valid entries are 1 or 125-144. Help is available.
  
  
• DISB DATE
  If an amount for the REFUND CHECK is entered, the disbursement date of the check may be entered in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. DISB DATE must be on or after the current date.

Shortage

This screen is used for both lease and asset payoffs. It is used to indicate the distribution of the payoff shortage. It appears if the TOTAL REC’D is less than the TOTAL PAYOFF, short payoffs are accepted, and the shortage is within the maximum allowable shortage for payoffs. (Refer to the Payoff Customizations option of the Portfolio update [U0212]).

PAYOFF SHORTAGE is displayed and is reduced by each amount entered. The shortage must be zero before the lease may be paid off. That is, the amounts entered for LOSS ON SALE and ALLOWANCE FOR BAD DEBT must equal PAYOFF SHORTAGE.

Note: for a lease payoff with a shortage, this is the last screen. Clicking on OK from this screen processes the lease payoff.

• PAYOFF SHORTAGE
  
  
• LOSS ON SALE
  Enter the amount of the shortage to be recorded as a loss on sale. The amount entered must be less than or equal to PAYOFF SHORTAGE.
  
  
• ALLOWANCE FOR BAD DEBT
  Enter the amount of the shortage that is to be charged against the allowance for bad debt account. (A percentage of the contract receivable for each new lease may be set aside as allowance for bad debt during lease booking.) The amount entered is subtracted from the PAYOFF SHORTAGE, and so must be less than or equal to the current PAYOFF SHORTAGE.
  
  When the Off Lease Billing module is purchased, this field will be accessible for both lease and asset Payoffs/Terminations.
  
  
• INVOICE (RENT)
  This field appears when the Off Lease Billing module is purchased and works in conjunction with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update.
  
  In order for the shortage amount to be billed, the user must enter the total amount to invoice. The default value of loss on Sale is Total Shortage amount based on LeasePak’s calculated base payoff amount.
  
  The Payoff cannot be reversed if ‘P’ for asset payoff or ‘Q’ for lease payoff type invoice is partially or fully paid. ‘P’ and ‘Q’ type invoices cannot be removed by accrual reversal and must be removed by Payoff Reversal.
  
  The new invoice can be viewed through the Account Receivable Balancing Report [R0404] with ‘P’ or ‘Q’ in front of the lease number.
  
  For lease Payoff, defaulted form the Payoff Quote Base Payoff reflects the amount on the invoice with type P (Asset Payoff Invoice) also included in the Outstanding Payment in Payoff if the new ‘Exclude Past Due Payment and Assessment Y/N switch is set to N. The invoice generated in Payoff will calculate sales tax if the switch CALCULATE SALES TAX ON PAYOFF is set to Y in the Lease Form [U0721]. The Rent amount in ‘P’ and ‘Q’ type invoices may be waived through Payment/Principal Waiver [U0102].

  The G/L for the Invoice Rent in Payoff will be calculated as follows:

  Debit	Credit
  Lease Payment Receivable	Operating Lease Income (OPR Lease)
  Lease Payment Receivable	Lessor Income (FIN Lease)

Asset Payoff - Payment Reschedule

• Confirm Payment Schedule

This screen is used for asset payoffs only. It is used to input a new payment schedule for the lease. Information about the existing lease and its remaining payment schedule is displayed.

After payment schedule adjustments are made and RETURN is pressed, new information for the lease is calculated and displayed. This information should be verified.

For operating leases, CONTRACT RECEIVABLE, TOTAL UNEARNED and NET INVESTMENT are not calculated.

• ACQUISITION COST - CURRENT/NEW
  The new acquisition cost is calculated and displayed. It is calculated by subtracting the acquisition cost of the paid off asset from the acquisition cost of the lease.
  
  
• OTHER CHARGES - CURRENT/NEW
  Other charges are calculated and displayed. They are calculated by subtracting other charges for the paid off asset from other charges for the lease.
  
  
• RESIDUAL - CURRENT/NEW
  The new residual is calculated and displayed. It is calculated by subtracting the residual of the paid off asset from the residual of the lease.
  
  
• CONTRACT RECEIVABLE - CURRENT/NEW
  The new contract receivable is displayed once the new payment schedule is entered. (This field is not applicable to operating leases or interest bearing loans.)
  
  
• TOTAL UNEARNED - CURRENT/NEW
  The new total unearned income is displayed once the new payment schedule is entered. (This field is not applicable to operating leases or interest bearing loans.)
  
  
• NET INVESTMENT - CURRENT/NEW
  The new net investment is displayed once the new payment schedule is entered. For interest bearing loans, NET INVESTMENT is the amount of principal outstanding. (This field is not applicable to operating leases.)
  
  
• LESSOR YIELD - CURRENT/NEW
  The new lessor yield is displayed once the new payment schedule is entered. For interest bearing loans, yield is only calculated for P&I accrual methods; it is not calculated for P+I accrual methods.
  
  
• REMAINING PMT SCHEDULE
  The remaining payment schedule, based on the number of lease payments already accrued, is displayed. The starting and ending payment numbers of each remaining payment schedule line are displayed.
  
  If invoices have been produced more than 30 days before their due dates and are not yet accrued, they are ignored. Replacements for such advanced invoices will be created the first time accruals are run after an asset payoff is final.
  
  
• NUMBER (scrolled area)
  Change the number of payments, if desired. Remember that the overall remaining term of the lease may not be changed.
  
  If advance payments are displayed, the placement, or occurrence, of the advance payments may be adjusted. However, the total dollar amount of advance payments in the remaining payment schedule may not be altered.
  
  If the lease is a fixed term lease with an automatic conversion to a month-to- month lease, the NUMBER of the last payment schedule must be 999.
  
  
• FREQUENCY (scrolled area)
  Change the frequency of the payments, if desired. The overall term of the lease may not be changed.
  
  
• AMOUNT (scrolled area)
  Reduce the payment amount to reflect the paid off asset. The resulting change in the contract receivable is used to calculate the new information for the lease (unearned, net investment, yield, etc.).
  

Confirm Payment Schedule

This screen is used for asset payoffs only. It is used to display the recalculated acquisition cost, residual, etc., and to confirm processing of the payoff.

• DO YOU WISH TO USE THIS PAYMENT SCHEDULE (Y/N)?
  Entering Y confirms the payment schedule and payoff. Entering N returns the user to the previous (payment schedule) screen.

Note: this is the last screen of an asset payoff. Entering Y into the last field and clicking on OK from this screen processes the asset payoff.

Payoff Reversal

• Reverse Lease Payoff
  
• Reverse Asset Payoff
  • Payment Reschedule
  • Confirm Payment Schedule

This option reverses the previous payoff of an asset or a lease.

In general, lease and asset payoffs can be reversed as long as the transaction records for the payoff are still in the Transaction (RTX) table. Running the Historical Payment/DTX Cleanup update [U0451] through End of Month will remove older transaction records.

Reversing Lease Payoffs

If one of the assets on a lease has already been paid off, then the remaining lease is paid off, neither payoff can be reversed.

Reversing Asset Payoffs

If an asset payoff is followed any of the actions below, it cannot be reversed:

• Paying off or terminating the remainder of the lease;
• paying off or terminating another asset on the same lease;
• placing another asset on the same lease using the Asset Add-On update [U0113].

If the user has purchased and is using the Notes Payable module, a warning message may be displayed if an active note is attached to the asset.

This screen is used to select Payoff Reversal from the Payoff options menu.

This screen is used to select the lease or asset whose payoff is to be reversed.

• LEASE
  This is the number of the lease whose payoff is to be reversed. To reverse an asset payoff, leave this field blank.
  
  
• ASSET
  This is the number of the asset whose payoff is to be reversed. To reverse a lease payoff, leave this field blank.
  

Reverse Lease Payoff

This is the first and only screen of a lease payoff reversal. It displays all the information recorded for the payoff.

• SECURITY DEPOSIT AMOUNT
  The amount of the security deposit used for the payoff is displayed.
  
  
• SUSPENSE AMOUNT (CLEARED)
  The amount of any suspense item used for the payoff is displayed.
  
  
• CLEARED ITEM NUMBER
  The suspense item number, if suspense was used, is displayed.
  
  
• CHECK AMOUNT
  The amount of the check entered on the payoff is displayed.
  
  
• CHECK NUMBER
  The check number entered for the payoff is displayed.
  
  
• LOSS
  Any amount recorded as a loss on sale is displayed.
  
  
• REASON CODE
  Select the reason code for the payoff reversal. Use the Help menu for a list for valid codes. This field is required for processing the payoff reversal.
  
  
• BAD DEBT
  Any amount recorded as a debit to the allowance for bad debt account is displayed.
  
  
• INVOICE RENT
  Any rent invoiced by the payoff is displayed.
  
  
• SUSPENSE AMOUNT (ENTERED)
  Any payoff overpayment that was placed in suspense is displayed.
  
  
• ENTERED ITEM NUMBER
  The suspense item number that was assigned to the SUSPENSE AMOUNT is displayed.
  
  
• CASHIER’S CHECK AMOUNT
  Any amount of overpayment that was refunded to the lessee is displayed.
  
  
• GAIN
  Any amount of overpayment that was retained as a gain on sale is displayed.
  
  
• TOTAL PAYOFF AMOUNT
  The total amount of the payoff is displayed.
  
  
• DO YOU WISH TO PROCESS THIS PAYOFF REVERSAL (Y/N)?
  Entering Y and clicking OK processes the payoff reversal. Entering N and clicking OK returns the user to the previous screen.

Reverse Asset Payoff

• Payment Reschedule
• Confirm Payment Schedule

This is the first screen of an asset payoff reversal. It displays all the information recorded for the payoff.

• SECURITY DEPOSIT AMOUNT
  The amount of the security deposit used for the payoff is displayed.
  
  
• SUSPENSE AMOUNT (CLEARED)
  The amount of any suspense item used for the payoff is displayed.
  
  
• CLEARED ITEM NUMBER
  The suspense item number, if suspense was used, is displayed.
  
  
• CHECK AMOUNT
  The amount of the check entered on the payoff is displayed.
  
  
• LOSS
  Any amount recorded as a loss on sale is displayed.
  
  
• BAD DEBT
  Any amount recorded as a debit to the allowance for bad debt account is displayed.
  
  
• INVOICE RENT
  Any rent invoiced by the payoff is displayed.
  
  
• SUSPENSE AMOUNT (ENTERED)
  Any payoff overpayment that was placed in suspense is displayed.
  
  
• ENTERED ITEM NUMBER
  The suspense item number that was assigned to the SUSPENSE AMOUNT is displayed.
  
  
• CASHIER’S CHECK AMOUNT
  Any amount of overpayment that was refunded to the lessee is displayed.
  
  
• GAIN
  Any amount of overpayment that was retained as a gain on sale is displayed.
  
  
• TOTAL PAYOFF AMOUNT
  The total amount of the payoff is displayed.
  
  
• DO YOU WISH TO PROCESS THIS PAYOFF REVERSAL (Y/N)?
  Entering Y and clicking OK processes the payoff reversal. Entering N and clicking OK returns the user to the previous screen.

Payment Reschedule

This screen is used for asset payoff reversals only. It is used to input a new payment schedule for the lease after an asset payoff reversal. Information about the existing lease and the payment schedule for the remaining term of the lease are displayed.

For operating leases, CONTRACT RECEIVABLE, TOTAL UNEARNED and NET INVESTMENT are not calculated.

• ACQUISITION COST - CURRENT/NEW
  The new acquisition cost is calculated and displayed. It is calculated by adding the acquisition cost of the paid off asset to the acquisition cost of the lease.
  
  
• OTHER CHARGES - CURRENT/NEW
  Other charges are calculated and displayed. The new charges are calculated by adding other charges for the asset paid off to other charges of the lease.
  
  
• RESIDUAL - CURRENT/NEW
  The new residual is calculated and displayed. It is calculated by adding the residual of the paid off asset and the residual of the remaining lease.
  
  
• TOTAL UNEARNED - CURRENT
  The current total unearned income is displayed.
  
  (Not applicable to operating leases.)
  
  
• NET INVESTMENT - CURRENT
  The current net investment is displayed.
  
  (Not applicable to operating leases.)
  
  
• LESSOR YIELD - CURRENT
  The current lessor yield is displayed.
  
  
• REMAINING PMT SCHEDULE
  The remaining payment schedule, based on the number of lease payments already accrued, is displayed. The starting and ending payment numbers of each remaining payment schedule line are displayed.
  
  
• NUMBER (scrolled area)
  Change the number of payments, if desired. The overall remaining term of the lease may not be changed.
  
  If advance payments are displayed, the placement, or occurrence, of the advance payments may be adjusted. However, the total dollar amount of advance payments in the remaining payment schedule may not be altered.
  
  If the lease is a fixed term lease with an automatic conversion to month-to- month, the NUMBER of the last payment schedule must be 999.
  
  
• FREQUENCY (scrolled area)
  Change the frequency of the payments, if desired. The overall term of the lease may not be changed.
  
  
• AMOUNT (scrolled area)
  Increase the payment amount to add back in the paid off asset. The change in the contract receivable is used to calculate new information for the lease (unearned, net investment, yield, etc.).

Confirm Payment Schedule

This screen is used for asset payoff reversals only. It is used to confirm the new payment schedule, display the new financial information, and process the payoff reversal.

• TOTAL UNEARNED - NEW
  The new total unearned income is calculated and displayed. TOTAL UNEARNED consists of:

  CURRENT UNEARNED
  + CHANGE IN PRINCIPAL
  + CHANGE IN SECURITY DEPOSIT
  + CHANGE IN ITC UNEARNED, IF ANY
  - CHANGE IN CONTRACT RECEIVABLE
  - CHANGE IN RESIDUAL

  (Not applicable to operating leases.)
  

• NET INVESTMENT - NEW
  The new net investment is calculated and displayed. NET INVESTMENT consists of:

  CURRENT NET INVESTMENT
  + CHANGE IN TOTAL UNEARNED INCOME
  - CHANGE IN CONTRACT RECEIVABLE
  - CHANGE IN RESIDUAL

  (Not applicable to operating leases.)
  

• LESSOR YIELD - NEW
  The new lessor yield is calculated and displayed. Refer to the Calculations document for more information on yield calculations.
  
  
• DO YOU WISH TO USE THIS PAYMENT SCHEDULE (Y/N)?
  Entering Y and clicking on OK processes the payoff reversal. Entering N and clicking on OK returns the user to the previous screen.

© 2001 by McCue Systems Incorporated.
All rights reserved.

The information contained in this document is the property of McCue Systems, Inc. Use of the information contained herein is restricted. Conditions of use are subject to change without notice. McCue Systems, Inc. assumes no liability for any inaccuracy that may appear in this document; the contents of this document do not constitute a promise or warranty. The software described in this document is furnished under license and may be used or copied only in accordance with the terms of said license. Unauthorized use, alteration, or reproduction of this document without the written consent of McCue Systems, Inc. is prohibited.