General Ledger Accounting
LeasePak provides full General Ledger accounting for the lease portfolio from lease commencement
through lease maturity and/or the disposition of the asset. All changes to the
General Ledger are recorded in the Transaction (RTX)
file and are reported on several Audit Control [R04] reports.
LeasePak employs the double-entry method of accounting. Every transaction affects two or
a multiple of two accounts by the same debit and credit amounts. This insures
that debits to the ledger always equal credits.
Accounts are categorized as either a debit balance or a credit balance account. An account
is a debit balance account if the sum of the debits normally exceeds the sum of
the credits. Examples of debit balance accounts are cash, receivable, and residual.
An account is a credit balance account if the sum of the credits normally exceeds
the sum of the debits. Examples of credit balance accounts are unearned income,
earned income, and payables.
A debit to a debit balance account increases the account's balance. A credit to
the account decreases its balance. Conversely, a credit to a credit balance account
increases the account's balance and a debit to the account decreases its balance.
Contents
The following is a general description of each LeasePak General Ledger account, segregated by type.
Assets
- Clearing (debit balance)
- This account is used in conjunction with the cash account to record transactions which
do not directly affect cash (e.g., Change Lease Key, Payoff, Termination, etc.).
- Cash (debit balance)
- This account holds all cash amounts received or disbursed.
- Contract Receivable (debit balance)
- This account holds the total of all remaining lease payments to be accrued plus the
guaranteed residual value for all precomputed interest type leases in the portfolio.
- Lease Payments Receivable (debit balance)
- This account holds the total of outstanding lease payments (accrued and billed) and use tax
receivable.
- Unguaranteed Residual - Precomputed (debit balance)
- This account holds the unguaranteed portion of the residual value of all precomputed
interest type leases in the portfolio.
- Lease Income Receivable (debit balance)
- This account holds the rental income accrued (but not due). A balance is present in
this account only for leases with other than monthly payment schedules. If there
are no non-monthly leases in the portfolio, the balance of this account is always
zero (however, there may be offsetting debit and credit activity).
- Unearned Residual Income (credit balance)
- This account holds the total unrecognized residual income for the precomputed interest
type leases in the portfolio. It is only used if residual income is accreted.
- Unearned Income (credit balance)
- This account holds the total unrecognized rental income (income remaining to be accrued) for the
precomputed interest type leases in the portfolio.
- Unearned ITC (credit balance)
- This account holds the total unearned book Investment Tax Credit for the precomputed
interest type leases in the portfolio. This account is used only if ITC income
is accrued for book purposes.
- Vendor Participation Unearned (credit balance)
- This account holds the total remaining vendor portion of the rental income to be accrued
for the precomputed interest type leases in the portfolio. This account is used
only if vendors are participating in the income earnings or a percentage of the
payment of leases.
- Investor Participation Unearned (credit balance)
- This account holds the total remaining investor portion of the rental income to be
accrued for the precomputed interest type leases in the portfolio. This account
is used only if investors are participating in the income earnings of leases.
- Assessed Fees (credit balance)
- This account holds the aggregate total of fees assessed and unpaid to the leases in the portfolio.
Only those fees which are accounted for on a cash basis are totaled in this account.
It is cleared when the fee is paid by the lessee.
- Assessments Receivable - Late Charge (debit balance)
- This account holds the total of all late charges assessed and unpaid by the lessee
for all leases in the portfolio.
- Assessments Receivable - Collection Fee (debit balance)
- This account holds the total of all collection charges assessed and unpaid by the lessee
for all leases in the portfolio.
- Assessments Receivable - Assumption Fee (debit balance)
- This account holds the total of all lease assumption fees assessed and unpaid by the
lessee for all leases in the portfolio.
- Assessments Receivable - Property Tax (debit balance)
- This account holds the total of all property tax assessed and unpaid by the lessee
for all leases in the portfolio.
- Assessments Receivable - Legal Fee (debit balance)
- This account holds the total of all legal fees assessed and unpaid by the lessee for
all leases in the portfolio.
- Assessments Receivable - Payment Extension (debit balance)
- This account holds the total of all payment extension fees assessed and unpaid by the
lessee for all leases in the portfolio.
- Assessments Receivable - ITC Fee (debit balance)
- This account holds the total of all ITC pass through fees assessed and unpaid by the
lessee for all leases in the portfolio.
- Assessments Receivable - FHUT (debit balance)
- This account holds the total of all federal highway use taxes assessed and unpaid by
the lessee for all leases in the portfolio.
- Assessments Receivable - Lease Rewrite Fee (debit balance)
- This account holds the total of all lease renegotiation fees assessed and unpaid by
the lessee for all leases in the portfolio.
- Assessments Receivable - Lease Extension (debit balance)
- This account holds the total of all lease extension fees assessed and unpaid by the
lessee for all leases in the portfolio.
- Assessments Receivable - Other Fees (debit balance)
- This account holds the total of all miscellaneous fees assessed and unpaid by the lessee
for all applicable leases in the portfolio.
- Assessments Receivable - Registration Fees (debit balance)
- This account holds the total of all registration fees assessed and unpaid by the lessee
for all applicable leases in the portfolio.
- Unamortized Registration Fees (credit balance)
- Registration fees are billed and due at commencement, then the income is amortized over the
term of the lease. This account holds the unamortized portions of the fees.
- Assessments Receivable - Opening Commission (debit balance)
- This account holds the total of all opening commission assessed and unpaid by the lessee
for all applicable leases in the portfolio.
- Unamortized Opening Commission (credit balance)
- Opening commissions are billed and due at commencement, then the income is amortized over
the term of the lease. This account holds the unamortized portions of the opening
commissions.
- Insurance Fee Receivable (credit balance)
- This account holds the total of all insurance fee receivables established on new leases
and unpaid.
- Insurance Fee Offset (debit balance)
- This is a memo account. LeasePak does not bill for insurance fee. When the fee is paid,
a manual G/L Adjustment [U0121] is performed.
- Vendor Subsidy Receivable (credit balance)
- This account holds the total of all vendor subsidy receivables established on new leases
and unpaid.
- Vendor Subsidy Offset (debit balance)
- This is a memo account. LeasePak does not bill for vendor subsidy. When the payment
is received, a manual G/L Adjustment [U0121] is performed.
- Principal Outstanding (debit balance)
- This account holds the principal balance outstanding for all simple interest type leases
in the portfolio.
- Residual - Simple (debit balance)
- This account holds the estimated market value of all simple interest type leases in
the portfolio. The sum of residual (simple) and principal outstanding is the net
investment in the lease.
- Leased Equipment (debit balance)
- This account holds the total book value at lease inception of all equipment on lease
for operating type leases.
- Unbilled Operating Lease Receivable (debit balance)
- This account holds the operating rental income accrued (but not due) for operating
leases with other than monthly payment schedules.
- Unbilled Operating Lease Income (debit balance)
- This account holds the total current unbilled income for all straight-line operating
leases (AOSL, ROSL) with uneven payment schedules. Since straight-line operating leases recognize income in even amounts,
unbilled income occurs when the billed payment amount is either less than or greater than the straight-line amount. If the billed
payment is less (for example, in a step-down schedule), the account holds a positive amount. If the billed payment is greater
(for example a step-up schedule), the account holds a negative amount. The net result at the end of the term, however, should be zero.
If there are no straight-line operating leases with uneven payment schedules, the balance in this account is always zero.
- Inventory (debit balance)
- This account holds the lower of the fair market value or the net book value at lease
termination of all equipment in inventory (not on-lease). The acquisition cost
of new equipment added onto the system but not yet booked as a lease is also included
in this account.
- Deferred Charge (debit balance)
- This account holds the portion of initial direct costs not yet accrued for all operating
type leases.
- Deferred ITC (credit balance)
- This account holds the portion of Investment Tax Credit not yet accrued for all operating
type leases.
- Unamortized IDC Cost (debit balance)
- This account holds the portion of initial direct costs which has not yet been amortized
(under Statement 91 of the Financial Accounting Standards Board).
- Unamortized Insurance Premium (IDC1) (debit balance)
- This account holds the portion of insurance fees which has not yet been amortized (under
Statement 91 of the Financial Accounting Standards Board).
- Unamortized Notary Fee (IDC2) (debit balance)
- This account holds the portion of notary fees which has not yet been amortized (under
Statement 91 of the Financial Accounting Standards Board).
- Vendor Receivable (debit balance)
- This account is only used if there is vendor participation in the lease and the vendor
is participating in a percentage of the payments (not income). This account holds
the total of all remaining vendor portions of the lease payments to be accrued
and billed.
- Principal Receivable (debit balance)
- This account holds the total principal unpaid for floating rate leases with level payments.
This account may have a positive or a negative balance. A positive balance indicates
a receivable to the lessor (resulting from a net increase in the interest rates
for floating rate leases); a negative balance indicates a payable (resulting from
a net decrease in the interest rates for floating rate leases).
- Assessments Receivable - Recurring Charge 1 (debit balance)
- This account holds the total of all recurring charges (type 1) assessed and unpaid
by the lessee for all leases in the portfolio.
- Assessments Receivable - Recurring Charge 2 (debit balance)
- This account holds the total of all recurring charges (type 2) assessed and unpaid
by the lessee for all leases in the portfolio.
- Assessments Receivable - Recurring Charge 3 (debit balance)
- This account holds the total of all recurring charges (type 3) assessed and unpaid
by the lessee for all leases in the portfolio.
- Assessments Receivable - Recurring Charge 4 (debit balance)
- This account holds the total of all recurring charges (type 4) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 5 (debit balance)
- This account holds the total of all recurring charges (type 5) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 6 (debit balance)
- This account holds the total of all recurring charges (type 6) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 7 (debit balance)
- This account holds the total of all recurring charges (type 7) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 8 (debit balance)
- This account holds the total of all recurring charges (type 8) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 9 (debit balance)
- This account holds the total of all recurring charges (type 9) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 10 (debit balance)
- This account holds the total of all recurring charges (type 10) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 11 (debit balance)
- This account holds the total of all recurring charges (type 11) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 12 (debit balance)
- This account holds the total of all recurring charges (type 12) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 13 (debit balance)
- This account holds the total of all recurring charges (type 13) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 14 (debit balance)
- This account holds the total of all recurring charges (type 14) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Recurring Charge 15 (debit balance)
- This account holds the total of all recurring charges (type 15) assessed and unpaid
by the lessee for all leases in the portfolio. This account is used only if the
Extended Recurring Charge module is purchased.
- Assessments Receivable - Escrow Recurring Charge
- This account holds the total of all escrow receivable recurring type charges assessed
with each lease.
- Assessments Payable - Escrow Recurring Charge
- This account holds the total of all escrow payable recurring type charges assessed
with each lease.
- Suspended Receivable (income) (debit balance)
- This account holds the unpaid income portion of payments accrued while a lease is in
a suspended earnings status. This account, in conjunction with Suspended Receivable
(principal), is used in place of Lease Payments Receivable for suspended leases.
- Suspended Receivable (principal) (debit balance)
- This account holds the unpaid principal portion of payments accrued while a lease is
in a suspended earnings status. This account, in conjunction with Suspended Receivable
(income), is used in place of Lease Payments Receivable for suspended leases.
- Suspended Income Receivable (unbilled) (debit balance)
- This account holds the suspended income accrued (but not due). A balance is present
in this account only for suspended leases with other than monthly payment schedules.
If there are no non-monthly suspended leases in the portfolio, the balance of
this account is always zero (however, there may be offsetting debit and credit
activity). This account exactly parallels the function of the Lease Income Receivable
G/L account.
- Loan Principal Receivable (debit balance)
- This account holds the unpaid principal portion of payments accrued for an interest
bearing loan. This account, in conjunction with Loan Interest Receivable, is used
in place of Lease Payments Receivable for interest bearing loans.
- Loan Interest Receivable (debit balance)
- This account holds the unpaid income portion of payments accrued for an interest bearing
loan. This account, in conjunction with Loan Principal Receivable, is used in
place of Lease Payments Receivable for interest bearing loans.
- LD Receivable (debit balance)
- This account holds the total balance of outstanding payments to collect on discounted
leases. Only payments due on or after the discounting effective date, and due
on or after the group effective date are included into this balance. This account
is used only if the Lease Discounting module is purchased and the investor required
switch in the Module Customizations option of the Portfolio update [U0212] is
set to Y.
- Suspended IDC Accrued (debit balance)
- This account holds the amount of IDC accrued while the lease is in a suspended earning
status. The IDC accrued is transferred out of this account into the IDC Amortization
GL when/if the earnings are reinstated for the lease.
- Suspended Insurance Premium (IDC1) Accrued (debit balance)
- This account holds the amount of insurance premium accrued while the lease is in a
suspended earning status. The premium accrued is transferred out of this account
into the insurance premium amortization GL when/if the earnings are reinstated
for the lease.
- Suspended Notary Fee (IDC2) Accrued (debit balance)
- This account holds the amount of notary fee accrued while the lease is in a suspended
earning status. The fee accrued is transferred out of this account into the notary
fee amortization GL when/if the earnings are reinstated for the lease.
- Security Deposit on Notes Payable (debit balance)
- This account holds the amount of security deposits held by the lender on notes payable.
It is the same G/ L account as that used to record credits for security deposits
for leases held by the lessor.
Liabilities
- Accounts Payable (credit balance)
- This account holds the total acquisition cost of all leased equipment which has not
yet been paid by the lessor. Payment occurs when a disbursement is made through
LeasePak for the asset.
- Vendor Participation Payable (credit balance)
- This account holds the total vendor portion of the rental income earned and payable
from all leases in the portfolio.
- Investor Participation Payable (credit balance)
- This account holds the total investor portion of the rental income earned and payable
from all leases in the portfolio.
- Use Tax Payable (credit balance)
- This account holds the total dollar amount of use tax accrued and/or payable from all
leases in the portfolio.
- Security Deposit Payable (credit balance)
- This account holds the total dollar amount of refundable security deposits held for
all leases in the portfolio.
- Taxes Payable (credit balance)
- This account holds the total amount of Investment Tax Credits accumulated for leases
in the portfolio. It typically has a negative balance because only tax credits
are tracked in the account.
- Assessments Payable - Property Tax (credit balance)
- This account holds the total of all property taxes to be paid to the taxing authorities
for all leases in the portfolio.
- Assessments Payable - FHUT (credit balance)
- This account holds the total of all federal highway use taxes to be paid to the taxing
authorities for all leases in the portfolio.
- Suspense (credit balance)
- This account holds the total dollars held to be researched and/or processed on a future date.
- Deferred Operating Lease Revenue (credit balance)
- This account holds the total amount of operating lease income collected and/or receivable
but not yet recognized as income.
- Notes Principal Outstanding Payable (credit balance)
- This account holds the total amount of notes payable principal payable not yet accrued.
- Notes Principal Payable (credit balance)
- This account holds the total amount of notes payable principal payable accrued and unpaid.
- Notes Interest Payable (credit balance)
- This account holds the total amount of notes payable interest payable accrued and unpaid.
- Unearned Premium Service Fee (debit balance)
- This account holds any GAP fee, service fee and lease fee to be paid to the lender
for notes payable.
- Reserve for Charge Back (credit balance)
- This account holds amounts in reserve for notes payable.
- Deferred Settlement (credit balance)
- This account holds the total balance of the outstanding expected settlement payments.
This account is used only if the Lease Discounting module is purchased and the
investor required switch in the Module Customizations option of the Portfolio
update [U0212] is set to Y.
- Settlement Payable (credit balance)
- This account holds the total balance of due settlement payments. This account is used
only if the Lease Discounting module is purchased and the investor required switch
in the Module Customizations option of the Portfolio update [U0212] is set to
Y.
- Commission Fees Payable (credit balance)
- This account holds the total amount of commission (broker) fees payable. This amount
is part of initial direct costs.
- Insurance Premium Payable (debit balance)
- This account holds the total amount of insurance premium (IDC1) payable to brokers.
- Notary Fee Payable (debit balance)
- This account holds the total amount of notary fees (IDC2) payable to brokers.
- Assessments Income/Payable - Recurring Charge 1 (credit balance)
- This account holds the total of all paid recurring charges (type 1) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end.
- Assessments Income/Payable - Recurring Charge 2 (credit balance)
- This account holds the total of all paid recurring charges (type 2) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end.
- Assessments Income/Payable - Recurring Charge 3 (credit balance)
- This account holds the total of all paid recurring charges (type 3) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end.
- Assessments Income/Payable - Recurring Charge 4 (credit balance)
- This account holds the total of all paid recurring charges (type 4) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 5 (credit balance)
- This account holds the total of all paid recurring charges (type 5) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 6 (credit balance)
- This account holds the total of all paid recurring charges (type 6) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 7 (credit balance)
- This account holds the total of all paid recurring charges (type 7) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 8 (credit balance)
- This account holds the total of all paid recurring charges (type 8) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 9 (credit balance)
- This account holds the total of all paid recurring charges (type 9) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 10 (credit balance)
- This account holds the total of all paid recurring charges (type 10) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 11 (credit balance)
- This account holds the total of all paid recurring charges (type 11) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 12 (credit balance)
- This account holds the total of all paid recurring charges (type 12) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 13 (credit balance)
- This account holds the total of all paid recurring charges (type 13) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 14 (credit balance)
- This account holds the total of all paid recurring charges (type 14) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
- Assessments Income/Payable - Recurring Charge 15 (credit balance)
- This account holds the total of all paid recurring charges (type 15) for all leases
in the portfolio. For income assessments, the account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, income assessments
are cleared at the fiscal year-end. This account is used only if the Extended
Recurring Charge module is purchased.
Income
- Revenue (credit balance)
- This account includes initial direct costs from all direct finance leases unless IDC is amortized
(under FASB Statement No. 91). This account also holds ITC accrued for all operating
leases.
- Lessor Income - Precomputed (credit balance)
- This account holds the total lease rental income earned from precomputed interest type
leases in the portfolio. This account may be cleared (zeroed) during the End of
Month process. If it is not cleared monthly, it is cleared at the fiscal year-
end.
- Lessor Income - Simple (credit balance)
- This account holds the total rental income earned from the simple interest type leases
in the portfolio. This account may be cleared (zeroed) during the End of Month
process. If it is not cleared monthly, it is cleared at the fiscal year-end.
- Operating Lease Income (credit balance)
- This account holds the total rental income accrued for all operating type leases. This
account may be cleared (zeroed) during the End of Month process. If it is not
cleared monthly, it is cleared at the fiscal year-end.
- Residual Income (credit balance)
- This account holds the total residual income earned from precomputed interest type
leases in the portfolio. This account may be cleared (zeroed) during the End of
Month process. If it is not cleared monthly, it is cleared at the fiscal year-
end.
- Other Charges (credit balance)
- This account holds the total dollar amount of additional charges to leases in the portfolio.
This account may be cleared (zeroed) during the End of Month process. If it is
not cleared monthly, it is cleared at the fiscal year-end.
- In-house Fees (credit balance)
- This account holds the total dollar amount of in-house fees collected from leases in
the portfolio. This account may be cleared (zeroed) during the End of Month process.
If it is not cleared monthly, it is cleared at the fiscal year-end.
- Documentation Fees (credit balance)
- This account holds the total dollar amount of documentation fees collected from leases
in the portfolio. This amount is part of initial direct costs. This account may
be cleared (zeroed) during the End of Month process. If it is not cleared monthly,
it is cleared at the fiscal year-end. This account is not used if IDC is amortized
(under FASB Statement No. 91).
- Termination Fees (credit balance)
- This account holds the total dollar amount of termination fees charged to terminating
leases. Included in this account are termination fees, prepayment penalties, excess
mileage, and excess wear and tear deductible charges. This account may be cleared
(zeroed) during the End of Month process. If it is not cleared monthly, it is
cleared at the fiscal year-end.
- Insurance Fees (credit balance)
- This account holds the total dollar amount of amortized insurance fees.
- Registration Fees (credit balance)
- This account holds the total dollar amount of amortized registration fees.
- Vendor Subsidy Income (credit balance)
- This account holds the total dollar amount of amortized vendor subsidy receivables.
- Opening Commission Income (credit balance)
- This account holds the total dollar amount of amortized opening commission receivable.
- Service Fee Income (credit balance)
- This account holds any GAP fee, service fee or lease fee collected on a notes payable.
- Assessments Income - Late Charge (credit balance)
- This account holds the total of all late charges paid for all leases in the portfolio.
- This account may be cleared (zeroed) during the End of Month process. If it is
not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Collection Fee (credit balance)
- This account holds the total of all collection charges paid for all leases in the portfolio.
This account may be cleared (zeroed) during the End of Month process. If it is
not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Assumption Fee (credit balance)
- This account holds the total of all lease assumption fees paid for all leases in the
portfolio. This account may be cleared (zeroed) during the End of Month process.
If it is not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Legal Fee (credit balance)
- This account holds the total of all legal fees paid by the lessee for all leases in
the portfolio. This account may be cleared (zeroed) during the End of Month process.
If it is not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Payment Extension (credit balance)
- This account holds the total of all payment extension fees paid by the lessee for all
leases in the portfolio. This account may be cleared (zeroed) during the End of
Month process. If it is not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - ITC Fee (credit balance)
- This account holds the total of all ITC pass through fees paid by the lessee for all
leases in the portfolio. This account may be cleared (zeroed) during the End of
Month process. If it is not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Lease Rewrite Fee (credit balance)
- This account holds the total of all lease renegotiation fees paid by the lessee for
all leases in the portfolio. This account may be cleared (zeroed) during the End
of Month process. If it is not cleared monthly, it is cleared at the fiscal year-end.
- Assessments Income - Lease Extension (credit balance)
- This account holds the total of all lease extension fees paid by the lessee for all
applicable leases in the portfolio. This account may be cleared (zeroed) during
the End of Month process. If it is not cleared monthly, it is cleared at the fiscal
year-end.
- Assessments Income - Other Fees (credit balance)
- This account holds the total of all miscellaneous fees paid by the lessee for all applicable
leases in the portfolio. This account may be cleared (zeroed) during the End of
Month process. If it is not cleared monthly, it is cleared at the fiscal year-end.
- Gain On Sale (credit balance)
- This account holds the total dollar gain on the sale of equipment. This account may be cleared (zeroed)
during the End of Month process. If it is not cleared monthly, it is cleared at
the fiscal year-end.
- Bad Debt Income (credit balance)
- This account holds the offset to unearned income for the bad debt expense. This account
may be cleared (zeroed) during the End of Month process. If it is not cleared
monthly, it is cleared at the fiscal year-end. This account is not used if IDC
is amortized (under FASB Statement No. 91).
- ITC Income (credit balance)
- This account holds the book Investment Tax Credit income earned if it is calculated
by the system. This account may be cleared (zeroed) during the End of Month process.
If it is not cleared monthly, it is cleared at the fiscal year-end.
- IDC Offset (credit balance)
- This account is used to hold initial direct costs (excluding broker or commission fees)
if IDC is amortized (under FASB Statement No. 91). This account may be cleared
(zeroed) during the End of Month process. If it is not cleared monthly, it is
cleared at the fiscal year-end.
- Suspended Income Accrued (credit balance)
- This account holds the amount of income accrued while the lease is in a suspended earnings
status. The income accrued is transferred out of this account into the appropriate
income account when/if the earnings are reinstated for the lease.
- Suspended Insurance Fee Income (credit balance)
- This account holds the amount of insurance fee accrued while the lease is in a suspended
earnings status. The income accrued is transferred out of this account into the
appropriate income account when/if the earnings are reinstated for the lease.
- Suspended Registration Fee Income (credit balance)
- This account holds the amount of registration fee income accrued while the lease is
in a suspended earnings status. The income accrued is transferred out of this
account into the appropriate income account when/if the earnings are reinstated
for the lease.
- Suspended Vendor Subsidy Income (credit balance)
- This account holds the amount of vendor subsidy income accrued while the lease is in
a suspended earnings status. The income accrued is transferred out of this account
into the appropriate income account when/if the earnings are reinstated for the
lease.
- Suspended Opening Commission Income (credit balance)
- This account holds the amount of opening commission income accrued while the lease
is in a suspended earnings status. The income accrued is transferred out of this
account into the appropriate income account when/if the earnings are reinstated
for the lease.
Expenses
- Loss On Sale Or Termination (debit balance)
- This account holds the total dollar loss on the sale of equipment or the termination
of a lease. A loss can be recorded at the termination of a lease if the fair market
value of the equipment is less than the net book value. In this case, the difference
is charged as a loss and the asset is placed into inventory at its fair market
value.
- Initial Direct Cost Expense (debit balance)
- This account holds the total amount of initial direct costs incurred for all leases
in the portfolio. This account is not used if IDC is amortized (under FASB Statement
No. 91).
- Depreciation Expense (debit balance)
- This account holds the monthly amount of depreciation accrued for operating type leases.
This account may be cleared (zeroed) during the End of Month process. If it is
not cleared monthly, it is cleared at the fiscal year-end.
- Reserve for Recapture Expense (credit balance)
- This account is used for adjustments to book Investment Tax Credit income recognized
when assets are disposed of early.
- Allowance For Bad Debt (credit balance)
- This account holds the total dollar amount of doubtful account allowances for leases
in the portfolio. This amount is part of initial direct costs.
- Accumulated Depreciation (credit balance)
- This account holds the total amount of depreciation accrued (life-to-date) for operating
type leases.
- Bad Debt Expense (debit balance)
- This account holds the bad debt expense accumulated for the lease portfolio. This account
may be cleared (zeroed) during the End of Month process. If it is not cleared
monthly, it is cleared at the fiscal year-end.
- IDC Amortization (debit balance)
- This account holds the amortized portion of initial direct cost if IDC is amortized
(under FASB Statement No. 91). This account may be cleared (zeroed) during the
End of Month process. If it is not cleared monthly, it is cleared at the fiscal
year-end.
- Insurance Premium (IDC1) Amortization (debit balance)
- This account holds the amortized portion of insurance premium if IDC is amortized (under
FASB Statement No. 91).
- Notary Fee (IDC2) Amortization (debit balance)
- This account holds the amortized portion of notary fees if IDC is amortized (under
FASB Statement No. 91).
- Property Tax Expense (debit balance)
- This account holds the total of all property tax assessed. This account may be cleared
(zeroed) during the End of Month process. If it is not cleared monthly, is cleared
at fiscal year-end.
- Federal Highway Use Tax Expense (debit balance)
- This account holds the total of all federal highway use tax assessed. This account
may be cleared (zeroed) during the End of Month process. If it is not cleared
monthly, is cleared at fiscal year-end.
- Note Interest Expense (debit balance)
- This account holds the total of all interest accrued for notes payable. This account
may be cleared (zeroed) during the End of Month process. If it is not cleared
monthly, is cleared at fiscal year-end.
- Notes Payable Interest Income/Expense (debit balance)
- This account holds per diem interest on notes payable.
- Provision for Rebate (debit balance)
- This account holds reserve for charge back on notes payable.
- Settlement Expense (debit balance)
- This account holds the total of all settlement payments paid. This account may be cleared
(zeroed) during the End of Month process. If it is not cleared monthly, is cleared
at fiscal year-end. This account is used only if the Lease Discounting module
is purchased and the investor required switch in the Module Customizations option
of the Portfolio update [U0212] is set to Y.
The General Ledger debit and credit transactions that are automatically performed
for the main updates are explained in this section. LeasePak employs the double-entry
method of accounting. That is, every transaction affects two or a multiple of
two accounts by the same debit and credit amounts. This insures that the debits
to the ledger always equal the credits.
Each
section details the debit and credit account pair(s) and the amount by which each
is changed in the following manner:
Description
of the transaction
|
General
Ledger Account | AMOUNT |
| DR
Debit Account | Amount
of Change |
| CR
Credit Account | |
General Ledger accounting
for the following functions are detailed:
New Lease Accounting
There
are several functions that are performed by the New Lease update [U0101], and
each has specific General Ledger accounting associated with it. These functions
are:
Add Asset
This transaction is performed by the Add Asset option of the New Lease update [U0101]. It places
an asset that has never been on the LeasePak system into inventory. Once in inventory,
the asset may be booked to a lease. A single transaction results:
Place
the asset into inventory and record a payable for the cost of the equipment.
| General Ledger Account |
Amount |
| DR
Inventory | Acquisition
Cost of the Equipment |
| CR
Accounts Payable | |
Book Lease
This
transaction is performed by the Book Lease option of the New Lease update [U0101].
It places a lease onto the LeasePak system. There are different sets of transactions
by accrual method of the lease (e.g., precomputed interest types, simple interest
types, and operating lease types). Discussion of the transactions is separated
into two areas:
-
Transactions unique to the accrual method, and
- General
transactions (applicable to any accrual method).
The
following transactions are unique to precomputed interest leases (i.e., leases
with an accrual method of Level Yield, Rule of 12/78ths, Rule of 12/ 78ths Half
Month Convention, and Straight Line):
- Set
up Contract Receivable and Unearned Income. Contract Receivable represents the
total expected lease payments to be received over the lease term. Unearned Income
represents the total amount of finance charge to be received over the lease term.
These transactions also clear the asset(s) from inventory and record income from
other charges.
|
General
Ledger Account | Amount |
| DR
Contract Receivable | Total
Acquisition Cost of all Assets on Lease |
|
CR Inventory | |
| | |
| DR
Contract Receivable | Total
Other Charges of all Assets on the Lease |
|
>CR Other Charges | |
| | |
DR
Contract Receivable
CR
Unearned Income | Minimum
Lease Payment
+
Guaranteed Residual
+Cap
Reduction
+Prorate
(if Capitalized)
-Total
Acquisition Cost
-Total
Other Charges |
| | |
| DR
Residual | Unguaranteed
Residual |
| CR
Unearned Income | |
Notice
that the prorate payment may be capitalized and earned as income over the life
of the lease or it may be taken directly into income at lease commencement. The
method of recognizing the income from the prorate payment is determined by the
parameter PRORATE INCOME, found on the first screen of the New Lease Customizations
option of the Portfolio update [U0212].
- Set
up the Unearned Investment Tax Credit (ITC) to be earned for book purposes.
| GENERAL
LEDGER ACCOUNT | AMOUNT |
| DR
Taxes Payable | Total
ITC of the Asset on the Lease |
| CR
Unearned ITC | |
Notice
that the Taxes Payable General Ledger account normally has a negative balance
since LeasePak only records tax credits in the account.
LeasePak
can bypass the accrual of book ITC income. The accrual or bypass of book ITC income
and the method of book ITC income accrual are determined by the parameters BOOK
ITC ACCRUE and INVESTMENT TAX CREDIT EXCLUDED FROM YIELD, respectively. Both of
these parameters are found on the first screen of the New Lease Customizations
option of the Portfolio update [U0212].
-
Redistribute the total unearned income to the participant unearned accounts (vendor
and investor), if applicable. The vendor may participate in either the income
earnings or a percentage of the lease payment. The participation method is determined
by the parameter VENDOR PARTICIPATES IN THE INCOME, found on the first screen
of the New Lease Customizations option of the Portfolio update [U0212].
The following transactions are only
performed if the vendor and/or investor is participating in the income earnings
of the lease. Refer to the Calculations document for the calculation of the portions
of unearned income for the vendor and investor.
| General
Ledger Account | Amount |
| DR
Unearned Income | Unearned
Income (Vendor portion) |
| CR
Vendor Unearned Income | |
| | |
| DR
Unearned Income | Unearned
Income (Investor portion) |
| CR
Investor Unearned Income | |
If the vendor is
participating in a percentage of the lease payment, the vendor portion of receivable
is separated from the lessor contract receivable. The vendor receivable is calculated
by applying the percentage of vendor participation to the total lease contract
receivable.
| General
Ledger Account | Amount |
| DR
Vendor Receivable | Vendor
Receivable |
| CR
Vendor Unearned Income | |
- If IDC is amortized
(under FASB Statement No. 91), set up the Unamortized IDC amount and the bad debt,
if any.
| General
Ledger Account | Amount |
| DR
Unamortized IDC Cost | Broker
Fees |
| CR
Commission Fees Payable | |
| | |
| DR
Unamortized IDC Cost | Total
IDC-Broker Fees |
| CR
IDC Offset | |
| | |
| DR
Bad Debt Expense | Allowance
for Bad Debt |
| CR
Allowance for Bad Debt | |
These are the only
transactions performed if IDC is amortized.
If IDC is not amortized (pre-FASB
Statement No. 91), recognize initial direct cost (IDC) income, if applicable.
Initial direct cost is normally composed of documentation fees (or a calculated
amount), broker fees, and the allowance for bad debt. Refer to the Calculations
document for more information on IDC.
The
following transactions record initial direct cost (IDC) expense, commission fees
payable, and income from documentation fees. They are always performed.
| General
Ledger Account | Amount |
| DR
IDC Expense | Broker
Fees |
| CR
Commission Fees Payable | |
| | |
| DR
IDC Expense | Documentation
Fees |
| CR
Documentation Fees | |
Initial
direct cost may either be recognized as income at lease booking or amortized over
the lease life (in proportion to the lease's income amortization). The method
of IDC treatment is determined by the parameter INITIAL DIRECT
COST
EXCLUDED FROM YIELD, found on the first screen of the New Lease Customizations
of the Portfolio update [U0212]. If IDC is recognized as income at lease commencement,
the following transaction is performed:
| General
Ledger Account | Amount |
| DR
Unearned Income | Broker
Fees |
| CR
Revenue | +Documentation
Fees or a Calculated Amount |
The
following transaction is performed to record the allowance for bad debt.
| General
Ledger Account | Amount |
| DR
Bad Debt Expense | Allowance
for Bad debt |
| CR
Allowance for Bad Debt | |
If bad debt is included
in initial direct cost and if IDC is recognized as income at lease booking, the
following transaction is performed. The parameter, BAD DEBT INCLUDED IN INITIAL
DIRECT COST, found on the first screen of the New Lease Customizations option
of the Portfolio update [U0212], specifies whether bad debt is part of IDC.
| General
Ledger Account | Amount |
| DR
Unearned Income | Allowance
for Bad Debt |
| CR
Bad Debt | |
-
Recognize amounts that are due at lease commencement, such as advance payment(s),
the prorate payment, and cap reduction. Different transactions are recorded depending
upon the payment method. There are three available options for payment of amounts
due at lease commencement: cash received, invoice lessee for amounts due, or reduce
the accounts payable to the vendor.
If
cash is received, the <debit account> is Clearing. If the lessee is invoiced,
the <debit account> is Lease Payments Receivable. If the accounts payable
to the vendor is reduced, the <debit account> is Accounts Payable.
| General
Ledger Account | Amount |
| DR
<debit account> | Advance
Payments |
| CR
Contract Receivable | +Cap
Reduction
+Prorate(if
Income only) |
| | |
| DR
<debit account> | Prorate
(if Income only) |
| CR
Lessor Income Precomputed | |
| | |
| DR
<debit account> | Vendor
Payment (Payment Participation only) |
|
CR Vendor
Receivable | |
| | |
| DR
Vendor Unearned Income | Vendor
Payment (Payment participation only) |
|
CR Vendor
Participation Payable | |
The following
transactions are unique to simple interest leases (i.e., leases with an accrual
method of simple fixed or simple floating). Within this group, leases using an
accrual method of VV or VL use a different set of transactions.
Leases
with an accrual method of VV or VL use the following transactions:
- Set up estimated Contract Receivable
and estimated Unearned Income. Estimated receivable and income are calculated
using the initial booking rates. These transactions also clear the asset(s) from
inventory and record income from other charge
| General
Ledger Account | Amount |
| DR
Contract Receivable | Total
Acquisition Cost of all Assets on the Lease |
|
CR Inventory | |
| | |
| DR
Contract Receivable | Total
Other Charges of all Assets on the Lease |
|
CR Other Charges | |
| | |
| DR
Contract ReceivableCR
Unearned Income | Estimated
Lease Payments
+Cap
Reduction
-Total
Acquisition Cost
-Total
Other Charges |
| | |
| DR
Residual | Unguaranteed
Residual |
| CR
Unearned Income | |
-
Recognize amounts that are due at lease commencement, such as advance payment(s),
the prorate payment, and cap reduction. Different transactions are recorded depending
upon the payment method. There are three available options for payment of amounts
due at lease commencement: cash received, invoice lessee for amounts due, or reduce
the accounts payable to the vendor.
If
cash is received, the <debit account> is Clearing. If the lessee is invoiced,
the <debit account> is Lease Payments Receivable. If the accounts payable
to the vendor is reduced, the <debit account> is Accounts Payable.
| General
Ledger Account | Amount |
| DR
<debit account>CR
Contract Receivable | Advance
Payment(s)
+Cap
Reduction |
| |
|
| DR
<debit account> | Prorate |
| CR
Lessor Income Precomputed | |
All other
simple interest leases use the following transactions:
-
Set up Principal Outstanding and Residual. These transactions also clear the asset(s)
from inventory, record income from other charges and documentation fees, and record
the payable for commission fees.
| General
Ledger Account | Amount |
| DR
Principal Outstanding | Total
Acquisition Cost of all Assets on the Lease |
|
CR Inventory | |
| | |
| DR
Principal Outstanding | Broker
Fees |
| CR
Commission Fees Payable | |
| | |
| DR
Principal Outstanding | Total
Other Charges of all Assets on the Lease |
|
CR Other Charges | |
| | |
| DR
Principal Outstanding | Documentation
Fees |
| CR
Documentation Fees | |
| | |
| DR
Residual-Simple | Residual |
| | |
-
Recognize amounts that are due at lease commencement, such as advance payment(s),
the prorate payment, and cap reduction. Different transactions are recorded depending
upon the payment method. There are three available options for payment of amounts
due at lease commencement: cash received, invoice lessee for amounts due, or reduce
the accounts payable to the vendor.
If
cash is received, the <debit account> is Clearing. If the lessee is invoiced,
the <debit account> is Lease Payments Receivable. If the accounts payable
to the vendor is reduced, the <debit account> is Accounts Payable.
| General
Ledger Account | Amount |
| DR
<debit account> | Advance
Payment(s) + Cap Reduction |
| CR
Principal Outstanding | |
| | |
| DR
<debit account> | Prorate |
| CR
Lessor Income Precomputed | |
The following transactions
are unique to operating leases.
-
Record the original value of
the leased asset(s). This transaction also clears the asset(s) from inventory.
| General
Ledger Account | Amount |
| DR
Leased Equipment | Total
Acquisition Cost of all Assets on Lease |
|
CR Inventory | |
- Record the
Investment Tax Credit (ITC) to be deferred over the life of the lease.
| General
Ledger Account | Amount |
| DR
Taxes Payable | Total
ITC for all Assets on the Lease |
| CR
Deferred ITC | |
- Record the
initial direct cost (IDC) to be deferred over the life of the lease. IDC consists
of the commission fee to the broker and any documentation fee.
| General
Ledger Account | Amount |
| DR
Deferred Charge | Commission
Fee |
| CR
Commission Fee Payable | |
| | |
| DR
Deferred Charge | Documentation
Fee |
| CR
Documentation Fee | |
-
Recognize amounts that are due at lease commencement, such as advance payment(s),
the prorate payment, and cap reduction. Also, adjust the operating lease income
recognized to a straight line method, if necessary. There are three available
options for payment of amounts due at lease commencement: cash received, invoice
lessee for amounts due, or reduce the accounts payable to the vendor.
If cash is received, the <debit
account> is Clearing. If the lessee is invoiced, the <debit account>
is Lease Payments Receivable. If the accounts payable to the vendor is reduced,
the <debit account> is Accounts Payable.
| General
Ledger Account | Amount |
| DR
OP Lease Income ReceivableCR
Operating Lease Income | Advanced
Payment(s)
+Cap
Reduction
+Prorate |
| | |
| DR
Unrecognized OP Lease IncomeCR
Operating Lease | Average
Monthly Lease Payment
-Advance
Payments |
The
following transactions are general and can apply to any type of lease (precomputed,
simple, or operating).
- If
a suspense item was entered, the entire remaining balance from suspense is cleared.
If only a partial amount is used, the remaining balance is replaced into suspense
in transaction 2.
| General
Ledger Account | Amount |
| DR
Suspense | Remaining
Suspense Balance |
| CR
Clearing | |
- Replace any
dollar amounts to suspense, if applicable.
| General
Ledger Account | Amount |
| DR
Clearing | Dollar
Amount to Replace Suspense |
| CR
Suspense | |
- Recognize
amounts that are due at lease commencement, such as security deposit, recurring
charges, and applicable use tax on advance payment(s), cap reduction, and/or the
prorate payment. There are three available options for payment of amounts due
at lease commencement: cash received, invoice lessee for amounts due, or reduce
the accounts payable to the vendor.
If
cash is received, the <debit account> is Clearing. If the lessee is invoiced,
the <debit account> is Lease Payments Receivable (for security deposit and
use tax) or Assessments Receivable (for recurring charges). If the accounts payable
to the vendor is reduced, the <debit account> is Accounts Payable.
| General
Ledger Account | Amount |
| DR
<debit account> | Security
Deposit Received |
| CR
Security Deposit Payable | |
| | |
| DR
<debit account>CR
Use Tax Payable | Advanced
Payments Tax Received
+Cap
reduction Tax Received
+Prorate
Payment Tax Received (if Use Tax is accounted for on an accrual basis) |
| | |
| DR
<debit account>CR
Assessed Fees | Advance
Payments Tax Received
+Cap
Reduction Tax Received
+Prorate
Payment tax Received (if Cash Basis Use Tax accounting and the Lessee is invoiced) |
- Record other disbursements, such
as asset acquisition cost payables, commission fee payables, etc.
| General
Ledger Account | Amount |
| DR
Accounts Payable | Total
Asset Acquisition Cost Disbursed |
| CR
Clearing | |
| | |
| DR
Commission Fees payable | Total
Broker Fees Disbursed |
| CR
Clearing | |
-
Record funding interest changes. Funding interest is applicable only if the parameter
FUNDING INTEREST IS USED, found on the first screen of the New Lease Customizations
option of the Portfolio update [U0212], is set to Y (yes). Funding interest adjusts
the accounts payable to the vendor by either increasing or decreasing the accounts
payable.
The
income account affected depends upon the type of the lease (precomputed, simple,
or operating). If the lease is a precomputed interest lease, the <income account>
is Lessor Income Precomputed. If the lease is a simple interest lease, the <income
account> is Lessor Income Simple. If the lease is an operating lease, the <income
account> is Operating Lease Income.
| General
Ledger Account | Amount |
| DR
<income account> | Funding
Interest Payable to Vendor |
| CR
Accounts Payable | |
| | |
| DR
Accounts Payable | Funding
Interest earned by Lessor |
| CR
<income account | |
-
Record the actual cash received and disbursed.
| General
Ledger Account | Amount |
| DR
CashCR
Clearing | Amount
Received at Lease Booking
-Amount
used from Suspense |
| | |
| DR
Clearing CR
Cash | Total
Amount of Checks Disbursed
+Commission
Fee Check Disbursed |
Change Asset
This
transaction is performed by the Change Asset update [U0120]. It adjusts the financial
information (starting cost, other charges, and residual) for an asset in inventory.
Only a change to the starting
cost results in a General Ledger transaction. Two different types of transactions
are performed depending upon the status of the asset whose starting cost is changed.
If the asset is in a pre-inventory status (i.e., no function of any kind has been
performed on the asset, such as an accounts payable disbursement, terminating
into inventory, etc.), the following transactions may be performed:
- If the starting cost is increased,
adjust the inventoried value and accounts payable by the amount of increase.
| General
Ledger Account | Amount |
| DR
Inventory | Increase
in Starting Cost |
| CR
Accounts Payable | |
- If
the starting cost is decreased, adjust the inventoried value and accounts payable
by the amount of decrease.
| General
Ledger Account | Amount |
| DR
Accounts Payable | Decrease
in Starting Cost |
| CR
Inventory | |
If the lease is in an inventory
status (i.e., some General Ledger function has been performed on the asset, such
as an accounts payable disbursement, terminating into inventory, etc.), the starting
cost may only be reduced (write down). The following transaction is performed:
- Adjust
the inventoried value for the write down, and record the write down as a loss.
| General
Ledger Account | Amount |
| DR
Loss on Sale or Termination | Write
Down Amount |
| CR
Inventory | |
Delete
Asset
This transaction
is performed by the Delete Asset option of the New Lease update [U0101]. It removes
an asset with a pre-inventory status from inventory. An asset is placed in inventory
through the Add Asset option of the New Lease update [U0101] with a pre-inventory
status. Any function performed on the asset, such as an accounts payable disbursement,
terminating into inventory, etc., changes the asset's status to inventory. Assets
with an inventory status may not be deleted through the Delete Asset option of
the New Lease update [U0101].
The
following transaction is performed:
-
Remove the asset from inventory and clear the accounts payable.
| General
Ledger Account | Amount |
| DR
Accounts Payable | Inventoried
Value (Acquisition Cost) |
| CR
Inventory | |
Disburse
Check
This transaction
is performed by the Disburse Check option of the New Lease update. It disburses
accounts payable to the vendor for equipment and to the broker for commission
fees. The following transactions may be performed:
-
Record a payable disbursement to the vendor for all or part of the acquisition
cost of the equipment.
| General
Ledger Account | Amount |
| DR
Accounts Payable | Vendor
Disbursal Amount |
| CR
Cash | |
-
Record a payable disbursement to the broker for all or part of the commission
fees for the lease.
| General
Ledger Account | Amount |
| DR
Commission Fees Payable | Broker
Disbursal Amount |
| CR
Cash | |
Rebook Accounting
A
rebook returns a lease to its original state as of lease booking (i.e., it performs
accrual reversals back to the commencement date of the lease), allows the user
to adjust the New Lease information, and then returns the lease to its current
status based upon the change of information (i.e., it re- accrues the lease to
its current accrual point).
In
recording General Ledger transactions, the rebook shows only the necessary adjustment
transactions. (The accrual reversal and re-accrual transactions are always shown,
however). If no General Ledger change is required (i.e., the financial information
of the lease is not changed during the rebook), then no rebook General Ledger
transactions are produced, except for any applicable accrual and/or reversal transactions.
An example of a
rebook
which does not change the financial information of the lease is a rebook which
only changes the commencement date of the lease and no other information.
An
example of a rebook which does change the financial information of the lease is
a rebook which increases the contract receivable of the lease by $100.00 (by changing
the lease payment schedule). Assuming no other changes were made, only the following
transaction is performed:
| General
Ledger Account | Amount |
| DR
Contract Receivable | Change
in Contract Receivable ($100.00) |
| CR
Unearned Income | |
Assessment Accounting
Assessment
accounting is performed in several areas within LeasePak. The Assessment option
of the Assessment update [U0105] establishes an assessment receivable. The Assessment
Waiver option of the Assessment update [U0105] clears an assessment receivable
account. Assessment accounting is also performed by the Payment update [U0102]
and several payable updates (e.g., the Property Tax/FHUT Payable update [U0119]
and as an option of the Third Party Payable update [U0122]).
Most
assessments may be accounted for on either a cash or an accrual basis. Recurring
charges are always accounted for on a cash basis. Using a cash basis, the assessment
income or payable is recorded in the General Ledger when the assessment is paid
by the lessee. Using an accrual basis, the assessment income or payable is recorded
in the General Ledger when the assessment is assessed to the lessee.
Each
assessment (with the exception of use tax) has its own receivable and income/payable
account on LeasePak. For example, the following accounts exist for Late Charges
(an income assessment):
-
Assessment Receivable - Late Charges
-
Assessment Income - Late Charges
All
other income assessments (e.g., Collection Fees, Assumption Fees, Legal Fees,
Other Fees, etc.) have similar General Ledger accounts.
The
following accounts exist for Property Tax and Federal Highway Use Tax (payable
assessments):
-
Assessment Receivable - Property Tax
-
Assessment Payable - Property
Tax
Use tax receivable
is held in the Lease Payments Receivable account with the regular lease payments.
There is, however, a separate Use Tax Payable account to hold use tax amounts
as they become payable.
The
General Ledger account Assessed Fees is used as an intermediate account for assessments
accounted for on a cash basis. That is, instead of crediting an income or payable
account when an amount is assessed, the Assessed Fees account is used as the offset
to the assessment receivable account. Then, when the assessment is paid by the
lessee and the amount should be recognized as income or a payable, Assessed Fees
is cleared and the offsetting credit is made to the assessment income or payable
account. Assessed Fees is not used if the assessment is accounted for on an accrual
basis.
Assessment accounting
may be generalized as follows:
-
Assessment
If the assessment is accounted for on a cash basis:
| General
Ledger Account | Amount |
| DR
Assessment Receivable | Assessment
Amount |
| CR
Assessed Fees | |
If the assessment
is accounted for on an accrual basis:
| General
Ledger Account | Amount |
| DR
Assessment Receivable | Assessment
Amount |
| CR
Assessment Income/Payable | |
If
the assessment is accounted for on a cash basis:
| General
Ledger Account | Amount |
| DR
Assessed Fees | Assessment
Waiver |
| CR
Assessment Receivable | |
If the assessment
is accounted for on an accrual basis:
| General
Ledger Account | Amount |
| DR
Assessment Income/Payable | Assessment
Waiver |
| CR
Assessment Receivable | |
The
following transaction is always performed to clear the assessment receivable account:
| General
Ledger Account | Amount |
| DR
Cash | Assessment
Payment Amount |
| CR
Assessment Receivable | |
If the assessment is
accounted for on a cash basis, the following transaction is also performed:
| General
Ledger Account | Amount |
| DR
Assessed Fees | Assessment
Payment Amount |
| CR
Assessment Income/Payable | |
-
Assessment Payment Reversal
The
following transaction is always performed to replace the amount of the reversal
in the assessment receivable account:
| General
Ledger Account | Amount |
| DR
Assessment Receivable | Assessment
Payment Reversal Amount |
| CR
Cash | |
- If
the assessment is accounted for on a cash basis, the following transaction is
also performed:
| General
Ledger Account | Amount |
| DR
Assessment Income/Payable | Assessment
Payment Reversal Amount |
| CR
Cash | |
- Assessment
Payable Disbursement
Use
Tax, Property Tax, and Federal Highway Use Tax assessments are payables. Recurring
Charges may be specified as either a payable or an income assessment. All other
assessments (e.g., late charges, collection fees, etc.) are considered income
assessments. The payable assessments have an additional disbursement function
to clear their respective payable accounts. This disbursement occurs in the Vendor
Income Participation report and the Vendor Payment
Participation
report (run through End of Month), the Property Tax/Federal Highway Use Tax Payable
update [U0119], and the Third Party Payable update [U0122] if a recurring charge
is specified as a payable assessment.
The
following transaction is performed:
| General
Ledger Account | Amount |
| DR
Assessment Payable | Amount
of Disbursement |
| CR
Cash | |
Payment Accounting
The
Payments update [U0102] processes a lease payment, which simply records cash received
and reduces the receivable account. The following transactions are performed for
non-interest bearing loans:
-
Record the reduction of lease payments receivable and the receipt of cash.
| General
Ledger Account | Amount |
| DR
Cash | Lease
Payment + Use Tax Paid |
| CR
Lease Payment Receivable | |
Payments made to assessments
are detailed in the Assessment Accounting section.
- If the vendor participates in
a percentage of the lease payment, an additional transaction is performed:
| General
Ledger Account | Amount |
| DR
Vendor Unearned Income | Vendor
portion of the Payment |
| CR
Vendor Participation Payable | |
For interest bearing
loans, the following transactions are performed:
- Payment
| General
Ledger Account | Amount |
| DR
Cash | Total
Payment Amount (Principal + Interest) |
| CR
Clearing | |
| | |
| DR
Clearing | Interest
Amount Paid |
| CR
loan Interest Receivable | |
| | |
| DR
Clearing | Principal
Amount Paid |
| CR
Loan Principal Receivable | |
- Adjustments
may be required based on the recalculation of accrued interest and principal after
the effective date of the payment. For example, if a principal payment is made,
future Lease Interest Receivable must be reduced because it was originally calculated
on a higher principal balance. Thus, the following transaction is created:
| General
Ledger Account | Amount |
| DR
Lessor Income-Simple | Interest
Adjustment |
| CR
Loan Interest Receivable | |
-
If the interest bearing loan is a P&I type, the principal due is also adjusted:
| General
Ledger Account | Amount |
| DR
Loan Principal Receivable | Interest
Adjustment |
| CR
Principal Outstanding | |
If the lease is in
a suspended earnings status, the following transactions are performed to reduce
the suspended principal and income receivable accounts:
| General
Ledger Account | Amount |
| DR
Cash or Clearing | Income
portion of the Payment |
| CR
Suspended Receivable (Income) | |
| | |
| DR
Cash or Clearing | Principal
portion of the Payment |
| CR
Suspended Receivable (Principal) | |
Payoff Accounting
There
are several functions that are performed by the Payoff update [U0103], and each
has specific General Ledger accounting associated with it. These functions are:
Payoff
This transaction is performed by the Payoff option of the Payoff update [U0103]. It
removes all the General Ledger account information for an asset or a lease, whether
it is paying off early or at maturity. Both a lease and an asset payoff use the
same set of transactions when updating the General Ledger - the dollar amounts
for the transactions, however, reflect the lease or the asset (portion of a lease)
being paid off.
The following
transactions result:
-
If a suspense item was entered, the entire remaining balance from suspense is
cleared. If only a partial amount is used, the remaining balance is replaced into
suspense in transaction 2.
| General
Ledger Account | Amount |
| DR
Suspense | Remaining
Suspense Balance |
| CR
Clearing | |
-
Replace any dollar amounts to suspense, if applicable.
| General
Ledger Account | Amount |
| DR
Clearing | Dollar
amount to replace Suspense |
| CR
Suspense | |
-
For precomputed interest leases, clear the remaining contract receivable, unguaranteed
residual, and lessor, vendor, investor, and book ITC unearned. There is a remaining
contract receivable and unearned only if the asset or lease is paying off early
(before lease maturity). The offsetting account is always Clearing.
| General
Ledger Account | Amount |
DR
Clearing
CR Contract Receivable | Remaining
Contract Receivable
+Guaranteed Residual |
| | |
| DR
Clearing | Unguaranteed
Residual |
| CR
Residual | |
| | |
| DR
Unearned Income | Remaining
Lessor Unearned |
| CR
Clearing | |
| | |
| DR
Unearned ITC | Remaining
Book ITC Unearned |
| CR
Taxes Payable | |
| | |
| DR
Vendor Unearned Income | Remaining
Vendor Unearned |
| CR
Clearing | |
| | |
| DR
Investor Unearned Income | Remaining
Investor Unearned |
| CR
Clearing | |
- Account
for any timing differences between the actual earning of ITC and the book recognition
of ITC income. For example, if a $10,000.00 5-year class piece of equipment is
sold in its third year, $600.00 of the total $1,000.00 of ITC claimed must be
recaptured. Assume, for book purposes, $535.00 of ITC income has already been
recognized. In reality, only $400.00 of ITC income has actually been earned; however,
$535.00 has been recorded as earned on the books. Therefore, an adjustment of
$135.00 is required.
| General
Ledger Account | Amount |
| DR
Reserve for Recapture Expense | Book
ITC Income Earned
-ITC
Retained for Tax purposes |
| CR
Taxes Payable | |
-
For simple interest leases, clear the principal outstanding and the residual accounts.
There is a principal outstanding only if the asset or lease is paying off early.
The offsetting account is always Clearing.
| General
Ledger Account | Amount |
| DR Clearing | Principal
Outstanding |
| CR
Principal Outstanding | |
| | |
| DR Clearing | Residual |
| CR Residual - Simple | |
-
Recognize any additional income resulting from a special payoff method (e.g.,
NPV of remaining payment stream). The difference between the calculated payoff
method and the net book value of the unit or lease is recognized as additional
income. Also, another transaction using the same debit and credit pair may be
written for any ITC fees charged. ITC fees are another type of payoff charge.
If the lease is a precomputed interest lease, the <credit account> is Lessor
Income - Precomputed. If the lease is a simple interest lease, the <credit
account> is Lessor Income - Simple.
| General
Ledger Account | Amount |
| DR
Clearing | Additional
Income from Payoff Calculation |
| CR
<credit account | |
- Clear
any accrued but unbilled (not due) lease income. This transaction is performed
for both precomputed interest leases and simple interest leases.
| General
Ledger Account | Amount |
| DR
Clearing | Lessor,
Vendor, Investor, and Book ITC Period to Date Income |
| CR
Lease Income Receivable | |
- Clear
the portion of the security deposit used for the payoff.
| General
Ledger Account | Amount |
| DR
Security Deposit | Portion
of the Security Deposit used |
| CR
Clearing | |
-
Record the termination fees charged.
| General
Ledger Account | Amount |
| DR
Clearing | Termination
Fees |
| CR
Termination Fees | |
-
Record any sales tax for the payoff that was paid, if any.
| General
Ledger Account | Amount |
| DR
Clearing | Sales
Tax for the Payoff |
| CR
Use Tax Payable | |
-
Record any gain on the payoff, if any.
| General
Ledger Account | Amount |
| DR
Clearing | Gain
on the Payoff |
| CR
Gain on Sale of Equipment | |
-
Record any loss on the payoff, if any.
| General
Ledger Account | Amount |
| DR
Loss on Sale of Equipment | Loss
on Payoff |
| CR
Clearing | |
-
Record a portion or all of the loss, if any, against the allowance for bad debt.
| General
Ledger Account | Amount |
| DR
Allowance for Bad Debt | Loss
Charged to Allowance for Bad Debt |
| CR
Clearing | |
- Record
the actual amount of cash received.
| General
Ledger Account | Amount |
| DR
Cash | Actual
Cash Received |
| CR
Clearing | |
-
If the lease is in a suspended earnings status and is terminated or charged off,
the amount of suspended income collected (i.e., paid by the lessee) is applied
against the outstanding principal balance. The remainder of the suspended income
earned and unpaid is backed out.
| General
Ledger Account | Amount |
| DR
Suspended Income Accrued | PTD
Income (unbilled) |
| CR
Suspended Income Receivable (unbilled) | |
| | |
| DR
Suspended Income Accrued | Suspended
Income Collected |
| CR
Contract Receivable (Precomputed) or Principal Outstanding (Simple) | |
| | |
DR
Suspended Income Accrued
CR Suspended Receivable (Income) |
Suspended
Income Accrued-PTD
Income (unbilled)
-
Suspended Income Collected |
- Any suspended IDC accrued for
the lease is reversed out and recognized as Unamortized IDC Cost.
| General
Ledger Account | Amount |
| DR
Unamortized IDC Cost | Suspended
IDC Accrued |
| CR
Suspended IDC Accrued | |
Termination
This
transaction is performed by the Termination option of the Payoff update [U0103].
It removes all the General Ledger account information for an on-lease asset or
a lease, whether it is terminating early or at maturity, and places the asset(s)
into inventory. Both a lease and an asset termination use the same set of transactions
when updating the General Ledger.
The
following transactions result:
- If
a suspense item was entered, the entire remaining
balance from suspense is cleared. If only a partial amount is used, the remaining
balance is replaced into suspense in transaction 2.
| General
Ledger Account | Amount |
| DR
Suspense | Remaining
Suspense Balance |
| CR
Clearing | |
-
Replace any dollar amounts to suspense, if applicable.
| General
Ledger Account | Amount |
| DR
Clearing | Dollar
Amount to replace in Suspense |
| CR
Suspense | |
- For
precomputed interest leases, clear the remaining contract receivable, unguaranteed
residual, and lessor, vendor, investor, and book ITC unearned. There is a remaining
contract receivable and unearned only if the asset or lease is terminating early
(before lease maturity). The offsetting account is always Inventory.
| General
Ledger Account | Amount |
DR
Inventory
CR Contract Receivable | Remaining
Contract Receivable
+ Guaranteed Residual |
| | |
| DR
Inventory | Unguaranteed
Residual |
| CR
Residual | |
| | |
| DR
Unearned Income | Remaining
Lessor Unearned |
| CR
Inventory | |
| | |
| DR
Unearned ITC | Remaining
Book ITC Unearned |
| CR
Inventory | |
| | |
| DR
Vendor Unearned Income | Remaining
Vendor Unearned |
| CR
Inventory | |
| | |
| DR
Investor Unearned Income | Remaining
Investor Unearned |
| CR
Inventory | |
- For
simple interest leases, clear the principal outstanding and the residual accounts.
There is a principal outstanding only if the asset or lease is terminating early.
The offsetting account is always Inventory.
| General
Ledger Account | Amount |
| DR
Inventory | Principal
Outstanding |
| CR
Principal Outstanding | |
| | |
| DR
Inventory | Residual |
| CR
Residual Simple | |
-
Recognize any additional income resulting from a special termination method (e.g.,
G12 - recognize the scheduled first 12 months of income if the lease is terminating
within the first 12 months of the lease). The difference between the calculated
termination method and the net book value of the asset or lease is recognized
as additional income. Also, another transaction using the same debit and credit
pair may be written for any ITC fees charged. ITC fees are another type of termination
charge. If the lease is a precomputed interest lease, the <credit account>
is Lessor Income - Precomputed. If the lease is a simple interest lease, the <credit
account> is Lessor Income - Simple.
| General
Ledger Account | Amount |
| DR
Inventory | Additional
Income from Termination Calculation |
| CR
<credit account> | |
-
Accrued but unbilled (not due) lease income is included in the termination amount
calculation. Recognize the receipt of the income. This transaction is performed
for both precomputed interest leases and simple interest leases.
| General
Ledger Account | Amount |
| DR
Clearing | Lessor,
Vendor, Investor, and Book ITC Period-to-date Income |
| CR
Lease Income Receivable | |
-
Clear the portion of the security deposit used for the termination.
| General
Ledger Account | Amount |
| DR
Security Deposit Payable | Portion
of the Security Deposit used |
| CR
Clearing | |
-
Record the termination fees charged.
| General
Ledger Account | Amount |
| DR
Clearing | Termination
Fees |
| CR
Termination Fees | |
- Record
any loss on the termination, if any.
| General
Ledger Account | Amount |
| DR
Loss on Sale or Termination | Loss
on the Termination |
| CR
Clearing | |
- Record a portion or all of the
loss, if any, against the allowance for bad debt.
| General
Ledger Account | Amount |
| DR
Allowance for Bad debt | Loss
charged to allowance for Bad Debt |
| CR
Clearing | |
-
Record the actual amount of cash received.
| General
Ledger Account | Amount |
| DR
Cash | Actual
cash received |
| CR
Clearing | |
-
Any suspended IDC accrued for the lease is reversed out and recognized as Unamortized
IDC Cost.
|
General
Ledger Account | Amount |
| DR
Unamortized IDC Cost | Suspended
IDC Accrued |
| CR
Suspended IDC Accrued | |
Sale of Asset in Inventory
This
transaction is performed by the Sale of asset in Inventory option of the Payoff
update [U0103]. It removes an asset from inventory.
The
following transactions result:
-
If a suspense item was entered, the entire remaining balance from suspense is
cleared. If only a partial amount is used, the remaining balance is replaced into
suspense in transaction 6.
| General
Ledger Account | Amount |
| DR
Suspense | Remaining
Suspense Balance |
| CR
Clearing | |
- Clear
the asset from inventory.
| General
Ledger Account | Amount |
| DR
Clearing | Inventoried
value of the Asset |
| CR
Inventory | |
-
Record a gain on sale of the equipment, if any. The gain is calculated as the
difference between the sales price and the inventoried value if the sales price
is greater than the inventoried value.
| General
Ledger Account | Amount |
DR
Clearing
CR
Gain on Sale of Equipment
| Sales
Price
-Inventoried
Value |
-
Record a loss on sale of the equipment, if any. The loss is calculated as the
difference between the inventoried value and the sales price if the inventoried
value is greater than the sales price.
| General
Ledger Account | Amount |
| DR
Loss on Sale of Equipment | Inventoried
Value Sales Price |
| CR
Clearing | |
-
Record the total amount of ITC recaptured for tax purposes.
| General
Ledger Account | Amount |
| DR
Reserve for Recapture Expense | Amount
of ITC Recaptured |
| CR
Taxes Payable | |
-
Replace any dollar amounts to suspense, if applicable.
| General
Ledger Account | Amount |
| DR
Clearing | Dollar
amount to replace in Suspense |
| CR
Suspense | |
-
Record the proceeds of sale (actual cash received).
| General
Ledger Account | Amount |
| DR
Cash | Actual
Cash Received |
| CR
Clearing | |
- Record
adjustment to inventory (reduce inventoried value).
| General
Ledger Account | Amount |
| DR
Depreciation expense | |
| CR
Inventory | |
-
Record adjustment to inventory (increase inventoried value).
| General
Ledger Account | Amount |
| DR
Inventory | |
| CR
Depreciation expense | |
Accrual Accounting
The
Accrual process recognizes income and sets up the accounts receivables for the
lease. Income is recognized through various methods, such as the level or constant
yield (FASB 13) method, Rule of 12/78ths, Straight Line, etc. Refer to the Calculations
document for more information about the different types of accrual methods.
The
following transactions result:
-
Recognize the lease income each month for the lessor, vendor, investor and book
ITC.
|
General
Ledger Account | Amount |
| DR
Lease Income Receivable | Lessor
Income |
CR
Lessor Income
or Lessor Income - Simple or Operating Lease Income | |
| | |
| DR
Lease Income Receivable | Vendor
Income |
| CR
Vendor Participation Payable | |
| | |
| DR
Lease Income Receivable | Investor
Income |
| CR
Investor Participation Payable | |
| | |
| DR
Lease Income Receivable | Book
ITC Income |
| CR
ITC Income | |
- Amortize
the suspended initial direct cost (under FASB Statement No. 91):
| General
Ledger Account | Amount |
| DR
IDC Amortization | IDC
Amortization |
| CR
Unamortized IDC Cost | |
-
If the payment is due this accrual, then reduce the unearned General Ledger accounts
and clear the Lease Income Receivable account for precomputed interest leases:
| General
Ledger Account | Amount |
| DR
Unearned Income | Period-to-date
Lessor Income |
| CR
Lease Income Receivable | |
| | |
| DR
Vendor Unearned Income | Period-to-date
Vendor Income |
| CR
Lease Income Receivable | |
| | |
| DR
Investor Unearned Income | Period-to-date
Investor Income |
| CR
Lease Income Receivable | |
| | |
| DR
Unearned ITC | Period-to-date
Book ITC Income |
| CR
Lease Income Receivable | |
For simple interest
leases (non-interest bearing loans), transfer the interest portion of the payment
to Lease Payments Receivable. The principal portion of the payment is transferred
in transaction 4.
| General
Ledger Account | Amount |
| DR
Lease Payments Receivable | Period-to-date
Lessor Interest |
| CR
Lease Income Receivable | |
For interest bearing
loans, transfer the interest portion of the payment to Loan Interest Receivable:
| General
Ledger Account | Amount |
| DR
Loan Interest Receivable | Period-to-date
Lessor Interest |
| CR
Lease Income Receivable | |
Period-to-date
income is the accumulated income accrued since the last time a lease payment was
due. For monthly leases, a payment is due each month the lease is accrued, therefore
period-to-date income for monthly leases always equals the monthly accrued income.
For quarterly leases, the period-to-date income when a payment is due equals the
current month's income accrued plus the previous two month's income accrued.
- If a payment is due this accrual,
transfer the amount of the payment from Contract Receivable to Lease Payments
Receivable for precomputed interest leases:
| General
Ledger Account | Amount |
| DR
Lease Payments Receivable | Payment
Amount Due |
| CR
Contract Receivable | |
For simple interest
leases (non-interest bearing loans), transfer the principal portion of the payment
from Principal Outstanding to Lease Payments Receivable.
| General
Ledger Account | Amount |
| DR
Lease Payments Receivable | Principal
portion of the Payment |
| CR
Principal Outstanding | |
For interest bearing
loans, transfer the principal portion of the payment to Loan Principal Receivable:
| General
Ledger Account | Amount |
| DR
Loan Principal Receivable | Principal
portion of the Payment |
| CR
Principal Outstanding | |
-
Record the use tax assessment for the payment. If use tax is accounted for on
an accrual basis:
| General
Ledger Account | Amount |
| DR
Lease Payments | Use
Tax |
| CR
Use Tax Payable | |
Otherwise, if use
tax is accounted for on a cash basis:
| General
Ledger Account | Amount |
| DR
Lease Payments Receivable | Use
Tax |
| CR
Assessed Fees | |
- If the lease is in a suspended
earnings status, the normal accrual process will calculate principal and income
according to the contract (i.e., as the borrower would view the loan). Income
and receivables accrued are placed in the suspended General Ledger accounts.
The following transactions are performed
if a precomputed interest type lease is in a suspended earnings status:
| General
Ledger Account | Amount |
| DR
Suspended Income Receivable (unbilled) |
Monthly
Income Accrued |
| CR
Suspended Income Accrued | |
| General
Ledger Account | Amount |
| DR
Unearned Income | PTD
Lessor Income |
| CR
Suspended Income Receivable (Unbilled) | |
| | |
| DR
Vendor Unearned Income | PTD
Vendor Income |
| CR
Suspended Income Receivable (Unbilled) | |
| | |
| DR
Investor Unearned Income | PTD
Investor Income |
| CR
Suspended Income Receivable (Unbilled) | |
| | |
| DR
Suspended Receivable (Income) | PTD
Income |
| CR
Contract Receivable | |
| | |
| DR
Suspended Receivable (Principal) | Principal
portion due |
| CR
Contract Receivable | |
The
following transactions are performed if a simple interest type lease is in a suspended
earnings status:
| General
Ledger Account | Amount |
| DR
Suspended Income Receivable (Unbilled) | Income
Accrued |
| CR
Suspended Income Accrued | |
| General
Ledger Account | Amount |
| DR
Suspended Receivable (income) | PTD
Income |
| CR
Suspended Income receivable (unbilled) | |
| | |
| DR
Suspended Receivable (principal) | Principal
portion due |
| CR
Principal outstanding | |
The following transactions
are performed if an operating type lease is in a suspended earnings status:
| General
Ledger Account | Amount |
| DR
Suspended Income Receivable (unbilled) | Income
Accrued |
| CR
Suspended Income Accrued | |
| General
Ledger Account | Amount |
| DR
Suspended Receivable (income) | Payment
Amount due |
| CR
Suspended Income Receivable (unbilled) | |
Suspended Earnings Accounting
When
income earnings are suspended for a lease (the lease is placed in a suspended
earnings status from an active status), the following General Ledger transaction
is performed to transfer the unbilled (but accrued) interest to its parallel suspended
G/L account:
|
General
Ledger Account | Amount |
| DR
Suspended Income Receivable (unbilled) | PTD
Income (unbilled) |
| CR
Lease Income Receivables | |
When
income earnings are reinstated for the lease (the account is changed from a suspended
earnings status to an active status), the following General Ledger
transactions are performed to move income and receivables from the suspended G/L
accounts to the normal G/L accounts:
| General
Ledger Account | Amount |
| DR
Lease Income receivable | All
PTD Income |
| CR
Suspended Income Receivable (unbilled) | |
| | |
| DR
Lease payments Receivable | Income
Outstanding (on RAR) |
| CR
Suspended Receivables (income) | |
| | |
| DR
Lease Payments Receivable | Principal
Outstanding (on RAR) |
| CR
Suspended Receivables (principal) | |
| | |
| DR
Suspended Income Accrued | Lessor
Income Accrued while on Suspended Earnings Status |
|
CR Lessor
Income (Precomputed or Simple | |
| | |
| DR
Suspended Income Accrued | Vendor
Income Accrued while on Suspended Earnings Status |
|
CR Vendor
Participation Payable | |
| | |
| DR
Suspended Income Accrued | Investor
Income Accrued while on Suspended Earnings Status |
|
CR investor
Participation Payable | |
| | |
| DR
Suspended Income Accrued | Residual
Income Accrued while on Suspended Earnings Status |
|
CR Residual
Income | |
Change Key Accounting
The
Change Lease Key update [U0114] and the Change Key option of the Change Asset
update [U0120] allow the user to transfer a lease or asset from one accounting
unit (portfolio, company, region, and office) to another accounting unit. A utility,
Batch Change Key, is also available which allows input of a file containing many
leases which will all be changed at once from one accounting unit to another.
The accounting that is performed for this move is simply a transfer of the appropriate
General Ledger amounts from one portfolio, company, region, office to another.
Two sets of related transactions
are performed, one for the old accounting unit (the one from which the lease or
asset is leaving) and one for the new accounting
unit (the one to which the lease or asset is moving). The offset for all transactions
is Clearing. For example:
| General
Ledger Account | Amount |
| DR
Clearing | Residual
Value (Old Office) |
| CR
Residual | |
| | |
| DR
Residual | Residual
Value (New Office) |
| CR
Clearing | |
Each
General Ledger amount for the lease would have similar transactions. The following
is a list of amounts which are transferred:
-
Contract Receivable + Guaranteed Residual (precomputed interest lease only)
-
Residual (precomputed interest lease only)
-
Unearned Income (precomputed interest lease only)
-
Unearned ITC (precomputed interest lease only)
-
Vendor Unearned Income (precomputed interest lease only)
-
Investor Unearned Income (precomputed interest lease only)
-
Principal Outstanding (simple interest lease only)
-
Residual - Simple (simple interest lease only)
-
Accounts Payable
- Lease
Payments Receivable (including use tax)
-
Assessment Receivable - Late Charge
-
Assessment Receivable - Collection Fees
-
Assessment Receivable - Assumption Fees
-
Assessment Receivable - Property Tax
-
Assessment Receivable - Legal Fees
-
Assessment Receivable - Payment Extensions
-
Assessment Receivable - ITC Fees
-
Assessment Receivable - Federal Highway Use Tax
- Assessment
Receivable - Lease Rewrite Fees
-
Assessment Receivable - Lease Extensions
-
Assessment Receivable - Other Fees
-
Assessment Receivable - Escrow Recurring Charge
-
Assessment Payable - Escrow Recurring Charge
-
Security Deposit
- Commission
Fees Payable
- Suspense
-
Lease Income Receivable
-
Unamortized IDC Cost
-
Inventory (an off-lease asset is transferred)
-
Suspended IDC Accrued
An
effective date for the change may be entered. If that date is in the past and
subsequent payments have been made, those payments are automatically reversed
and reapplied. Changes to multiple leases initiated through the Batch Change Key
utility (e.g., securitization) use the Batch Payments module [U0415] to reapply
payments which have been reversed.
Reconciliation Procedures
The
purpose of the reconciliation is to prove the balances in the General Ledger accounts
as shown on the General Ledger Entries Listing report [R0406] using various detail
reports. The reconciliation should be performed at the office level at least twice
monthly (mid-month and month- end). It is strongly recommended that reconciliation
be performed at least once a week after installing new releases of the LeasePak
system which include accounting changes.
All
reconciliation reports must be generated at the same time with no updating being
done while the reports are being generated.
The
reconciliation process consists of the following steps:
Note: General Ledger
accounts are listed on the General Ledger Listing if there is a balance in the
account or if there was any debit/credit activity to the account.
LeasePak Documentation Suite
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