New Lease [U0101]: Book Lease

This update is part of the New Lease [U0101] group of updates. For an introduction to New Lease and links to all the New Lease documents, refer to New Lease [U0101].

Contents

Book Lease Screens

 

Introduction

Book Lease is an option of the New Lease update, which can be accessed through the main LeasePak Updates menu, New Lease option, or by entering U0101 into Fast Menu <F2>.

This option either books a lease created as the booking process progresses or books a lease from an existing application. In the case of an existing application, if the application information is complete and ready for booking, it may be easier to use the Quick Book Lease option of the New Lease update. In either case, assets to be attached to the lease must already be in inventory. Use either the Add Asset or Quick Add Asset option to add an asset to inventory.

The following audit reports will be generated after booking a lease. For report layouts, please refer to Lease Inquiry report [R0905] options:

The following audit report will also be generated.

 

New Lease Invoice Status Report


The New Lease Invoice Status report [U0101B] is at the lease level and provides the following information for each lease booked:

 

Application/Lease Selection

 

Application Selection

This screen appears if the Application Tracking module [U08], a separately purchased module of LeasePak, is used.

 

Lease Selection

This screen appears if an application number was not entered on screen 1 and either lease numbers are manually assigned or the user has the privilege to override automatically assigned numbers. Otherwise, LeasePak automatically assigns and shows the lease number, and screen 3 of this update is displayed.

The method LeasePak uses to assign lease numbers is determined by the LEASE/APPLICATION NUMBERING METHOD parameter. The options for assignment of lease number are:

 

 

Assets on Lease

This screen is used to specify the assets in inventory to be assigned to this lease.

Assets may be placed in inventory through the Add Asset option of the New Lease update [U0101] or through the Termination option of the Payoff update [U0103]. A termination occurs when the lessee ends the lease agreement and returns the asset to the lessor.

 

Fees, Payment Schedule

 

This screen is used to enter financial information and payment schedule(s) for the lease. Totals of acquisition cost, other charges, and residual for all the assets entered on the previous screen are displayed.

Any payment in the schedule may be specified to be an advance payment. For instance, if the first and last payments are due in advance, enter:

Payment Schedule

Number

Frequency

Amount

1

1

ADVM

100.00

2 - 59

58

MON

100.00

60

1

ADVM

100.00

LeasePak automatically assumes that the first payment is in advance if the lessor accrual method (ACCRUAL LESSOR) indicates an advance lease (the first character of the accrual method is an A, as in AAPR or ASTR). So the above payment schedule could also be entered as:

Payment Schedule

Number

Frequency

Amount

1 - 59

59

MON

100.00

60

1

ADVM

100.00

Since any payment in the schedule can be specified as an advance payment, the first, twelfth, and twenty-fourth payments are advance payments with the following schedule:

Payment Schedule

Number

Frequency

Amount

1 - 11

11

MON

100.00

12

1

ADVM

100.00

13 - 23

11

MON

100.00

24

1

ADVM

100.00

 

Fees, Payment Schedule (Vehicle Finance Module)

When the Vehicle Finance module is purchased, the above screen appears. The Total Insurance Premium, Notary Fee, Vendor Subsidy, Total Insurance Fee, Registration Fee and Opening Commission Fee do not appear. The IDC/IDR information will be entered in another screen. All other fields as described above remain the same.

 

Participation, Rates

 

Precomputed, Operating Lease - Vendor/Investor Participation

This screen is used to enter participation factors, if applicable, for the vendor and investor under all lessor accrual methods except simple interest. An alternate screen appears instead if the lessor accrual method (ACCRUAL LESSOR) is a simple interest method.

The CONTRACT FACTOR is calculated and displayed for precomputed interest leases but not for operating leases.

When RETURN is pressed, yields are calculated and displayed. A message appears indicating yields are displayed on the screen. This allows the user to verify that system-calculated yields fall within the normal range. If not, the financial information entered may be incorrect.

Yields are not calculated for month-to-month operating leases since they cannot be determined until after the lease is terminated.

For level yield leases billed monthly in arrears (LESSOR ACCRUAL is RAPR), and for principal and interest bearing loans billed monthly in arrears (LESSOR ACCRUAL is RAXx), the yield displayed when RETURN is pressed may change. If the LEASE DATE AFFECTS YIELD parameter on the New Lease screen of the Portfolio update [U0212] is set to Y, accrual for RAPR and RAXx leases begins on the lease date rather than the commencement date. Once LEASE DATE is entered on the next screen, yield is recomputed.

 

Simple Interest Lease, Interest Bearing Loan - Rates

This screen is used to enter the lessor rate and the vendor and investor associated with this lease if the lessor accrual method (ACCRUAL LESSOR) is a simple interest method.

If the accrual method is not VT or VL (the simple interest principal portion of the payment only is entered in the payment schedule), when RETURN is pressed, the lessor yield is calculated and displayed. A message appears indicating that the yield is displayed on the screen. This allows the user to verify that the yield falls within the expected range. If not, the financial information entered may be incorrect.

For VT and VL methods, only the principal portion of the lease payments is entered into the payment schedule; these methods do not require an internal yield calculation.

An alternate screen is used if the lessor accrual method (ACCRUAL LESSOR) is a precomputed or operating lease accrual method.

      • LT (e.g., RLT0)
      • VT (e.g., RVT5)
      • VV (e.g., AVVE)
      • VL (e.g., RVL6)
      • AF (e.g., RAF6)
      • IF (e.g., AIFE)

    If the percentage to be entered is 2%, for example, enter _2.00000, not ____.02000.

    If the add-on rate is zero, do not enter any add-on rate. LeasePak accepts the entry of zero.

    A negative add-on may be entered by entering a minus sign ('-) in front of the float rate percentage add-on (for example: -2.00000).

 

IDC/IDR (Vehicle Finance Module)

This screen appears in the Book Lease option when the Vehicle Finance module is purchased.

This option allows the user to establish IDC/IDR information for the lease that is being booked. These fields may be customized in the Assessment Customizations option of the Portfolio update [U0212].

The IDC/IDR fees entered will be tracked during the life of the lease, as well as provide an Amortization Schedule based on the accrual methods used when the lease was booked. If an application is entered and Enhanced IDC/IDR fees are entered at the time of entry, all relevant information on the application is transferred and displayed.

The fifty-three additional G/L accounts that have been added in LeasePak v3.1a will track receivables, fees, expenses, debits and credits. All G/L accounts can be reconciled via the Lease Inquiry [R0905]. Specific accounts may reconciled via the G/L Reconciliation [R0403], G/L Entries Listing [R0406] and the Master G/L Reconciliation [U0460] reports. Refer to General Ledger Accounting for detailed information.

Additionally, LeasePak v3.2a will perform Alternate book lease transactions when performing corresponding GAAP book lease transactions. The amounts will be identical to the current IDC journal entries. This will provide accounting information and allow the alternate accounting values to be recorded for retail dealer reserves.

Multiple depreciations methods, lease receivables, rental incomes, asset sales, subvention income, acquisition fees and dealer reserves will be recorded in additional G/L accounts.

The new alternate accounting method will allow a for multiple depreciation methods on a single asset. For example a Straight Line depreciation method without subtracting Salvage Value or Residual Values on a 60 month fixed term. The second an ADR Straight Line without subtracting Salvage Value or Residual Values on a 60 month fixed term. The third depreciation method includes a monthly depreciation of 2.5% of the Assets Net Value, switching to a Straight Line over 5 years in the beginning of the year, when the monthly depreciation of the straight line is greater than the declining depreciation method. Two new fields have been added to this update to support the alternate accounting: RESERVES SL TERM and ACQ. FEE SL TERM.

The values of this fields will be displayed in Lease Inquiry Report [R0905] Asset Detail section.

When the Partial Deductions module is purchased, all A/R records will default to the lease at time of booking.

Leases with Operating type accrual methods will be amortized with straight line methods. All other accrual methods, will be amortized with a proportional income basis method. However, IDRC-Warranty Insurance will use only straight line methods.

Leases that are booked with precomputed methods will use a straight line amortization schedule when the following applies:

If the Sum of Payment Schedule - Total Contract Acquisition Cost = (+/ -) 0.99

Leases that are booked with IBL type accrual methods must have the Estimated Unearned income manually entered into the L_EST_UE_D field in the RAP or the RLS tables in order to calculate the earned IDC/IDR:

New Earned IDC/IDR: ((Lessor Rental Income Y-T-D/Estimated Unearned) *Original IDC/IDR) - IDC/IDR Y-T-D

If there is nothing entered in this field, LeasePak will calculate the Estimated Unearned as follows:

Estimated Unearned = Minimum Payments Receivable - Total Contract Acquisition Cost

The Total Contract Acquisition Cost is calculated as follows:

+ Unguaranteed Residual
- (Acquisition Cost - Down Payment)
- Other Charges

Minimum Lease Payments Receivable is calculated as follows:

Number of Payments * payment amount (according to payment schedule)
+ Guaranteed Residual
+ Interim Rent (when Interim Rent is set to N in [U0212NL])

If the yield/rate (Total Interest Rate) is zero, a straight line amortization method will be used for IBL's.

Note: The INCLUDE IDC IN 'NPV' and 'OPR' PAYOFFS' switch in the Payoff Customizations option of the Portfolio [U0212] update have no affect on the new IDC/IDR fields.

Enhanced IDC/IDR, supports the following accrual methods when only one asset is tied to the lease:

Field Descriptions

 

Dates, Codes

This screen is used to enter various parameters for the lease.

The number of days between the COMMENCEMENT DATE and the DISBURSEMENT DATE is displayed if FUNDING INTEREST EARNED or PAYABLE is calculated. It should be verified.

    The interim rent is included only if it is also included in the yield calculation, as specified through the INTERIM RENT (Y/N) parameter on the first screen of the New Lease Customizations option of the Portfolio update [U0212].

The number of days between the COMMENCEMENT DATE and the DISBURSEMENT DATE is displayed if FUNDING INTEREST EARNED or PAYABLE is calculated. It should be verified.

When entry on this screen is complete, a message may appear, RECALCULATED YIELD. NEW YIELD IS xx.xxxxx. With purchase of the 1994 JULE Fund, a parameter is added to the New Lease Customizations screen of the Portfolio update [U0212]. That parameter allows one lengthened initial accrual period for level yield leases and some interest bearing loans billed monthly in arrears, using Lease Date rather than commencement date as the beginning of the first accrual period. After Lease Date is entered on this screen, the yield is recalculated. This applies only to accrual methods RAPR and RAXx.

 

Recurring Charges, Revolving Credit

This screen is used to enter recurring charges for the lease. A recurring charge is an amount assessed with each payment due on or between the START DATE and the END DATE entered here. The column labels on the screen can be customized through Field Customization option of the Portfolio update [U0212FC].

Accounting for recurring charges payable is on a cash basis. That is, the charge is not payable to the broker or vendor until payment is received from the lessee. Broker names and addresses are maintained in the Broker update [U0219]; Vendor names and addresses, in the Vendor update [U0201].

The recurring charge descriptions on the screen, MAINTENANCE, INSURANCE, and BROKER, can be customized through the Assessment Customizations option of the Portfolio update [U0212].

A maximum of 3 recurring charges may be established through the second screen of the Assessment Customizations option of the Portfolio update [U0212].

If the Extended Recurring Charges module is purchased, up to 15 types of recurring charges can be established. However, the total number of other assessments and recurring charges that may be on a lease is limited to 10, which is the maximum number of assessments allowed on an invoice. Two of these 10 assessments are reserved for Use Tax (STAX) and Late Charges (LTCH). In addition, the following assessments, if defined on a lease, will limit the number of recurring charges allowed:

If no recurring charges are established, this screen will not appear. The recurring charges may be accounted for as either a payable to a third party or as lease income.

Note: In order to enter Revolving Credit Line information for the lease, the user must tab through all Recurring Charge fields, click OK or hit Enter. This will allow access to the Revolving Credit and Insurance Risk Fee% fields on this screen.

Note: When a late charge is to be pyramiding,do not enter a value in this field.

By entering a Minimum Payment Amount, LeasePak will assess and process a late charge for an invoice if any of the following scenarios take place:

The calculation will depend on the new "Previous Late Charge" flag (prev_ltch_s) being set to "Y" in the RLS table. The default value of the flag is set to "N" at the time of booking.

In both cases, the Prev Late Charge flag will be set to "Y" and the date that EOP automatically assessed the late charge will be stored on the contract. If late charge is not charged Prev Late Charge flag will be set to "N" by the next accrual.

Due Day
Monthly Payment Amount
Invoice Due
Date
Late Charge Assessment Date
Assess Late Charge (Y/N)
Payment Received
Payment Received Date
Next Invoice Date
Late Charge Assessment Date
Assess
Late Charge
(Y/N)
Next
Invoice
Date
Late Charge Assessment Date
Payment Received
Payment Received Date
Assess Late Charge (Y/N)
2
300.00
1/02/2002
1/13/2002
Y
300.00
1/20/2002
2/02/2002
2/13/2002
N
3/02/2002
3/13/2002
0.00
N/A
Y
2
300.00
1/02/2002
1/13/2002
Y
275.00
2/12/2002
2/02/2002
2/13/2002
Y
3/02/2002
3/13/2002
300.00
3/12/2002
N
2
300.00
1/02/2002
1/13/2002
Y
0.00
N/A
2/02/2002
2/13/2002
Y
3/02/2002
3/13/2002
275.00
3/05/2002
Y
2
300.00
1/02/2002
1/13/2002
Y
300.00
2/12/2002
2/02/2002
2/13/2002
N
3/02/2002
3/13/2002
250.00
3/01/2002
Y
2
300.00
1/02/2002
1/13/2002
Y
250.00
2/11/2002
2/02/2002
2/13/2002
Y
3/02/2002
3/13/2002
300.00
3/11/2002
N
2
300.00
1/02/2002
1/13/2002
Y
300.00
2/1/2002
2/02/2002
2/13/2002
N
3/02/2002
3/13/2002
250.00
3/08/2002
Y

Note: Suppressed Late Charges are not supported by Non-pyramiding Late Charges.

Leases placed in Suspended Earnings [U0115] with "H" or "N" type status will have the "Prev Late Charge" flag set to "N".

The Assessment [U0105] update will not be supported for Non-pyramiding Late Charges.

 

Preauthorized Payments (PAP) Information

This screen defaults the PAP ACCOUNT number and the PAP INSTITUTION ID for the Lessee. This screen is displayed only if:

Field Descriptions

 

Capital Cost Allowance

This screen is used to enter notional loan information for Capital Cost Allowance calculations. This screen is displayed only if:

Field Descriptions

 

Lease-Level Addresses

This screen is used to enter address information. Both the individual address and billing address should be used for exceptions only. Normally, the lessee address and lessee billing address are used. Refer to the Lessee update [U0203] for more information on lessee addresses. The individual billing address is printed on invoices if the BILL LEVEL (C/ L/I) field on screen 6 of this update is coded I.

 

Amounts Due at Commencement

 

This screen is used to show which amounts due at lease commencement have actually been received. Amounts which may be due at commencement are:

If amounts have not been received, they may be invoiced to the lessee, or the payable to the vendor may be reduced. The latter method assumes that the vendor collects and retains the amounts.

Note: If the Partial Deductions module is purchased, an alternate screen will be displayed. See below for information on the Partial Deductions screen.

Tax amounts for advance payment(s), down payment, and interim rent are automatically calculated unless a recurring charge with the special type of T (tax) is in effect on the lease commencement date. If a type T recurring charge exists, the tax amounts are zero and the tax is included in the amount shown for the tax recurring charge.

Note: Recurring charge tax type is not supported in combination with the Sales Tax on Assessments module. Only one or the other may be active.

There is a maximum of 3 recurring charges. If the Extended Recurring Charges module is purchased, then up to 15 types of recurring charges can be established. However, the total number of other assessments and recurring charges that may be defined on the lease is limited to 10, which is the maximum number of assessments allowed on an invoice. Two of the maximum 10 assessments are reserved for Use Tax (STAX) and Late Charges (LTCH). In addition, the following assessments, if defined on a lease, will limit the number of recurring charges allowed:

This screen also displays miscellaneous calculated amounts which may be checked against the lease agreement.

Field Descriptions

 

Amounts Due at Commencement (Partial Deductions Module)

If the Partial Deductions module is purchased, this screen is used to show how the amounts due at lease commencement are to be processed. Any portion of the amounts due may be received, invoiced, reduce the accounts payable to the vendor, or any combination of the three. If an overpayment occurs (both lessor and vendor received a check, for example) a partial amount may be placed into suspense.

Tax amounts for advance payment(s), down payment, and interim rent are automatically calculated unless a recurring charge with the special type of T (tax) is in effect on commencement. If type T recurring charge exists, tax amounts are zero and the tax is included in the amount shown for the Tax recurring charge. Amounts which may be due at lease commencement are:

There is a maximum of 3 recurring charges.

If the Extended Recurring Charges module is purchased, then up to 15 types of recurring charges can be established. However, the total number of other assessments and recurring charges that may be defined on a lease is limited to 10, which is the maximum number of assessments allowed on an invoice. Two of the maximum of 10 assessments are reserved for Use Tax (STAX) and Late Charges (LTCH). In addition, the following assessments will limit the number of recurring charges allowed:

SECD Security Deposit

CAPR Down Payment

PROR Interim Rent

DREC Dealer Receivable

Recurring charge descriptions, MAINTENANCE, INSURANCE, and OTHER, can be customized through the Assessment Customizations option of the Portfolio update [U0212]. Names established for each recurring charge are displayed in lieu of MAINTENANCE, etc.

This screen also displays miscellaneous calculated amounts which may be checked against the lease agreement calculations. Refer to the documentation for the screen without Partial Deductions for further information on these display only, informational fields.

 

This screen is used to specify how the total A/P reduction is to be allocated among the assets. This screen will appear if the Partial Deductions module is purchased and A/P amounts were specified on the previous screen. Without Partial Deductions, LeasePak would automatically reduce the asset's A/P balance first-come first-served. By using this screen the user may allocate A/P to the asset(s) desired and for the amount(s) desired.

 

Co-Lessee/Guarantor, Salesperson

This screen is used to enter co-lessee, guarantor, and salesperson information.

Co-lessees are established with the Lessee update [U0203]. A maximum of 10 co-lessees may be entered. Note that the lessee cannot also be a co-lessee for the lease.

Salespeople are established with the Salesperson Name update [U0702]. A maximum of 10 salespeople may be entered.

 

 

Credit Information

This screen may be used to enter credit information for the lease.

 

Insurance Information

This screen is used to enter insurance information for the lease.

The insurance information section is a scrolled area of eighteen fields. These fields scroll up or down in unison. Five scrolled lines are available, allowing entry of up to five insurance policies. Pressing SCROLL UP and SCROLL DOWN on any insurance field automatically places the cursor on the INSUR TYPE field.

Up to 5 screens of insurance information, each recording a separate insurance policy, may be entered. Clicking on the NEXT INSURANCE RECORD and PREV INSURANCE RECORD bars allows the user to progress through multiple policies.

Note: The Insurance Risk Fee enhancement will only function if the Type selected is 'Full Coverage' and 'Self Insured'. If 'Not Required' is selected, no Insurance Risk Fee will be charged.

Additionally, the Status will have no bearing on this enhancement,e.g. 'Binder on File', 'Complete and Correct', 'Due to Expire' etc., will not affect the Insurance Risk Fee charges.

Field Descriptions

 

Target Principal Levels (Interest Bearing Loan)

This screen is displayed if the lease is an interest bearing loan and if target principal levels are used. (Refer to the TARGET PRINCIPAL BALANCES USED field of the Modules Customizations option of the Portfolio update [U0212].) This screen is used to enter target levels for accrual of the payments.

 

User Defined Fields/Table

 

User Defined Lease Fields

This screen is used to enter user defined fields for leases. This screen appears if the User Defined Fields module is purchased, and if fields are defined for the portfolio to which the lease belongs. The number of fields displayed depends on what is defined for the lease in the USER DEFINED FIELDS/TABLE option of the Portfolio update [U0212]. In this example the user defined fields are used to store information on the source of the lease.

 

User Defined Lease Table

This screen is used to enter user defined table information for the lease. This screen only appears if the User Defined Fields module is purchased, and if table columns are defined for the portfolio to which the lease belongs. In this example, the user defined table is a log of contacts with the lessee.

The number of columns displayed depends on what is defined for lease tables in the USER DEFINED FIELDS/TABLE option of the Portfolio update [U0212]. If 1 to 6 columns are defined, one scrolled area of 1 to 6 columns is displayed. If 7 to 12 columns are defined, the table is horizontally split into two scrolled areas. The two areas scroll independently of each other.

 

Check Disbursal

 

This screen is used to disburse funds for the lease, if applicable. Funds may be disbursed at a later date through the Check Disbursal option of the New Lease update [U0101]. However, titling tax must be disbursed at initial booking.

This screen may be used to disburse as many checks as necessary for this lease by answering Y to DO YOU WISH TO DISBURSE ANOTHER CHECK (Y/N)? The default is Y until the TOTAL ACCTS PAYABLE is zero.

If no more checks are to be disbursed, change the code to N.

If the lease is tied to an insurance asset, LeasePak will perform the proper edit checks to disallow the check to be disbursed for the insurance asset at the time the lease is booked. LeasePak will automatically perform the proper transactions to book the lease. The Daily Transaction Journal [R0405] will display all transaction listings for the lease.

 

Alternate Check Disbursal

This alternate Disburse Check screen is used when the Custom General [U0712] switch ALTERNATE A/P CHECK SCREEN is set to Y. This screen displays the accounts payable amount asset by asset. After processing all assets, payments are disbursed for commission fees, funding interest payable, and other non-asset payables. Blank screens continue to display until the lease's total A/P amount is disbursed, or until the user answers N to the prompt DO YOU WANT TO DISBURSE ANOTHER CHECK (Y/N)?

Note: If any Dealer Alert switches are turned on in Vendor [U0201], the owed amount will not be disbursed. If the Suspense Override Date is populated, the owed amount will be disbursed only up to the specified date.

 

LeasePak  Reference Guide

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