Termination Method, Eff Date Amounts Apply Over/Short Reschedule Term Reversal Lease Asset

Payoff [U0103]: Termination, Termination Reversal

This update is part of the Payoff [U0103] group of updates. For an introduction to Payoff and links to all the Payoff documents, refer to Payoff [U0103].

 

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

When an asset is terminated, the value of the asset at termination is debited to the LeasePak Inventory G/L account, and the asset will appear on the Off Lease Asset report [R1001]. When a lease is terminated, the values of all its attached assets are debited to Inventory, and they will appear on the Off Lease Asset report as well.

Contents

• Termination

  • Method, Effective Date
    
  • Termination Amounts
    
  • Apply Termination or Place in Suspense
    
  • Overage/Shortage
    • Overage
    • Shortage
      
  • Asset Termination - Payment Reschedule
    • Confirm Payment Schedule
      
      
      

• Termination Reversal

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

 

Termination

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

Terminating Leases

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

Terminating Assets

In order to perform an asset termination, the asset to be terminated must not be the only asset attached to the lease. If only one asset is attached to the lease, perform a lease termination.

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

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

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

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

 

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

 

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

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

Note: U0103 ensures that the funding tax payable on acquisition cost, broker fee, IDC1 Insurance Premium, and IDC2 Notary Fee are disbursed before termination of an asset or a lease. An error message will appear when any of the above accounts payable are not disbursed before termination.

 

Method, Effective Date

This screen is used for both lease and asset terminations, with the following exception: the field INS REFUND appears on the lease termination screen only.

The screen is used to specify parameters for the termination. If a termination quote has been established for the lease or asset using the Payoff Quote update [U0213], termination information from the Payoff Quote (RPD) file is displayed on this screen. The quote's termination parameters may be changed.

For asset terminations, the accrued to date for the lease is used as the effective date. Refer to the Accrual Section of the Lease Inquiry report [R0905] for a lease's accrued to date.

The asset status code changes to AINV (available - in inventory) after termination. The asset status code may be changed through the Asset update [U0210] if a different status is desired. Asset status codes are established through the Custom Code update [U0722].

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

• TERMIN METHOD
  Enter or change the termination calculation method. TERMIN METHOD defaults to the method specified on the Payoff Quote (RPD) file. If no Payoff Quote record exists, the TERMIN METHOD defaults to the method on the lease agreement as established on the Lease Form update [U0721]. The method may be changed to another valid method, if desired.
  

  The matrix below shows which methods are valid for each lease type.

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

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

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

Note: When the Vehicle Finance module is purchased, only the following Pre-Computed Payoff/Termination methods will be available: CF3, EBV, FIX,G12, NONE, NPV, PR, PV2,PVS, PVT,RV, TAX, WO.

The supported termination methods for non-monthly accrual/billing cycle leases are EBV, INV, and NONE.

• EFFECTIVE DATE
  For an asset termination, the effective date defaults to the accrued to date of the lease and may not be changed.

  For a lease termination, enter or change the effective date in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706].

  EFFECTIVE DATE may be set to any date in the past as long as all lease payments due after the EFFECTIVE DATE are outstanding (unpaid) on the Accounts Receivable (RAR) file. LeasePak automatically reverses the lease back to the EFFECTIVE DATE entered. This means that the lease is reversed to the first payment due date on or before the EFFECTIVE DATE. For example, a lease with a payment due date of the first day of the month and a termination EFFECTIVE DATE of 11/30 reverses to 11/1.

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

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

  For interest bearing loans, the termination EFFECTIVE DATE must be on or after the last payment effective date. For IBLs in NMAT (matured) status and with Capitalize Interest set to 'N', you can specify an effective date as far forward of the accrued-to date as needed. The asset payoff EFFECTIVE DATE must be on the accrued to date.

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

  Example

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

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

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

  Lease Payoff
  PMTS OUTSTD shows a different interest calculation.

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

• SUSPENSE ITEM
  Enter or change, if desired, the suspense item which is to be used for the termination, if applicable. If LeasePak's session assignment is used and no items from suspense are assigned, then this field may not be accessed.
  
  
• TERMIN SOURCE
  Enter or change the termination source. TERMIN SOURCE is informational only. Codes are established through the Custom Codes update [U0722] under code SRC, Payoff Source codes. Use HELP for a list of valid termination sources.
  
  
• SOURCE NAME
  The Source Name for the lease is defaulted based on the Termination Source entered and may be modified. The Vendor Name, Customer Name and/or the Insurance Agent Name will default from the lease when the Termination Source Code selected begins with a C*** (customer), D*** (vendor/dealer) or I*** (insurance agent). Payoff/Termination (SRC-Payoff Source) Source Codes are defined in the Custom Codes [U0722] update.
  
  
• FMV
  Enter or change the total fair market value of the asset(s) to be terminated. If a lease is being terminated, add the fair market values of all the assets for the lease and enter the total in this field.

  Asset(s) are placed into inventory at the lower of the fair market value or the net book value. If the fair market value is lower, the difference between the FMV and the net book value is recorded as a loss. Therefore, it is very important that the fair market value be entered correctly. If the FMV entered is too low and the asset is placed into inventory at this low value, an incorrect loss is recorded. There is no update to increase the cost of an asset once it is placed in inventory.

• EXCESS MILEAGE
  This field may be accessed only if the lease agreement contains an excess mileage charge (refer to the Lease Form update [U0721]). Enter or change the number of miles above the allowable mileage recorded for the vehicle, if applicable. Multiplying this number by the cents per mile charge specified on the lease agreement results in the excess mileage charge included in the FEE/PENALTY amount.

• TERMIN RATING
  Enter or change the termination rating. TERMIN RATING is informational only. Termination rating codes are established through the Custom Codes update [U0722] under code RAT, Payoff Lease Rating. Use HELP for a list of valid ratings.
  
  
• WEAR & TEAR
  This field may be accessed and an amount charged only if a wear and tear deductible is entered on the lease agreement (refer to the Lease Form update [U0721]). Enter or change the wear and tear charges on termination, if applicable. The lessee is charged this amount if it is less than the wear and tear deductible specified on the lease agreement. If the total amount is greater than the wear and tear deductible, the deductible amount is charged. The charge is included in the FEE/PENALTY.
  
  
• SALES PARTY
  Enter R if the asset was sold to a related party (e.g., a sale from a captive to its parent) or U if unrelated (sale to an outside third-party).
  
  
• EXCLUDE PAST DUE PAYMENT AND ASSESSMENT (Y/N)
  This switch will appear when the Off-Lease Billing module is purchased. This field will work in conjunction the with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update.
  
  Select this field (check the box) for all past due payment and assessments to be excluded from the Payoff Quote. This will allow the user to override the Base Amount and the outstanding Payment and/or assessment amount. This will also enhance the functionality as given below:
  
  
For Off-Lease Billing users only: If this switch is set to Y and the switch RECOGNIZE CASH-BASIS INVOICE INCOME AT PAYOFF in the Miscellaneous Customizations option of the Custom General [U0712] update is turned on, the program will allow the lessor to recognize all remaining income and residual reduction at the time a lease is paid off or terminated, even if the lease has been extended on a cash basis and has open receivables.

Also supports Asset Focus Module.

Unselect the field (clear the box) for all past due payment and assessments to be included in the Payoff.

 

Termination Amounts

This screen is used for both lease and asset terminations, with the following exceptions: the fields LIFE REBATE, DIS REBATE, CHECK NUMBER, BATCH NUM, and INS REFUND appear for lease terminations only.

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

• CHECK AMOUNT
  Enter the amount received for the termination. CHECK AMOUNT is included in TOTAL REC'D.

• BASE TERMIN
  The base termination amount of the lease or asset is calculated, using the TERMIN METHOD and the EFFECTIVE DATE, and displayed.
  
  
• ADDL INTEREST
  Any additional interest required by the payoff method is displayed and may be modified.
  
  
• SECURITY DEP
  The security deposit for the lease is displayed. SECURITY DEP is included in TOTAL REC'D. For asset terminations only, this amount may be reduced.

  Cash Control module, security deposit suspense item: if the Portfolio [U0212] Payoff Customizations switch Holding Security Deposit in Payoff/Term is set to 'T' or 'B', the security deposit amount is not included in TOTAL REC'D, but placed in suspense. LeasePak will create a new suspense item using the batch and check number from the original security deposit payment. In the case where more than one security deposit payment was received, LeasePak will create individual suspense items for each of the security deposit payments, using originial batch and check numbers. The security deposit remains in suspense until applied to outstanding invoices or the number of days set in Holding Period for Security Deposit Disbursal has expired. If the termination is reversed, the security deposit is restored, unless the amount has been disbursed through the Auto Security Deposit Suspense Disbursal [U0436] and Cashier's Check Disbursal [U0117] updates.

  You can create security deposit suspense items during payoff or termination for leases only. They are not available for interest bearing loans (IBLs).

  
  
  
• PMTS OUTSTD
  The amount of lease payments outstanding on or before the EFFECTIVE DATE is calculated and displayed.
  
  
• FEE/PENALTY
  The fees or penalties charged to the lessee on the termination are displayed and may be modified. FEE/PENALTY is calculated according to the information entered on this screen and on the lease agreement (refer to the termination section of the Lease Form update [U0721]). Included in this amount are termination charges, excess mileage charges, and wear and tear charges.
  
  The Fee/Penalty amount is included in Other income Y-T-D (req.oth_ytd_d) and Other income L-T-D (req.oth_ltd_d) and is also tracked separately in Payoff/Termination Fee/Penalty L-T-D (req.payoff_fee_ltd_d). Fee/Penalty amounts are reversed if the user performs a Termination Reversal. The amount in req.payoff_fee_ltd_d should reconcile to the balance in the general ledger account 88 Termination Fees.
  
  
• SUSPENSE AMT
  If a SUSPENSE ITEM was entered, the remaining balance is displayed. These funds are used as part of the termination amount received and are included in TOTAL REC'D.
  
  
• ASSM OUTSTD
  The amount of all assessments outstanding, regardless of the EFFECTIVE DATE, is calculated and displayed. Use tax due for lease payments on or before the EFFECTIVE DATE is included in this amount. Use the Assessment Waiver option of the Assessment update [U0105] to waive the charge if it is not collectible.
  
  
• INV SETTLEMNT
  This optional field is available for input if the Lease Discounting module is purchased. In addition, on the Portfolio update [U0212] Modules Customizations screen, both the LEASE DISCOUNTING USED and INVESTOR REQUIRED FOR LEASE DISCOUNTING fields must be coded Y. The termination must be processed at the lease level.

  Enter the amount due to the investor, including any participation in the termination gain/loss. The field defaults to match CHECK AMOUNT. It may be overridden, but cannot be greater than the CHECK AMOUNT.

  Payoff Reversal backs out the amount from INVESTOR SETTLEMENT.

• BANK CODE
  This field will appear if the Multiple Banks module has been purchased. It allows the user to specify which bank should be used to process the termination. The default is 125; valid entries are 1, 125-144, or 499-520. Help is available. If invoices exist that are partially paid, the bank code used in the first partial payment will be defaulted. If a suspense item is used, the bank code from that suspense item will be defaulted.
  
  
• LIF 1 REBATE
  The total IDR7 - Credit Life Insurance 1 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• LIF 2 REBATE
  The total IDR8 - Credit Life Insurance 2 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• DIS 1 REBATE
  The total IDR9 - Credit Disability 1 amount for the lease is displayed, when the Vehicle Finance module is purchased.
  
  
• DIS 2 REBATE
  The total IDRA - Credit Disability Insurance 2 amount for the lease is displayed, when the Vehicle Finance module is purchased.

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

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

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

• BATCH NUMBER
  When the Cash Control module is purchased, LeasePak will display the Batch Number associated with the lease.

• QUOTE BASE TERMINATION
  This field appears if the Off-Lease Billing module is purchased and works in conjunction with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update. This field will be populated is the Termination Quote was created in Payoff Quote [U0213]. This field may be changed.

• TOTAL REC'D
  TOTAL REC'D is the sum CHECK AMOUNT, SECURITY DEPOSIT and SUSPENSE AMT.

• TOTAL TERMINATION
  The sum of all components of the termination calculation is displayed. TOTAL TERMINATION is calculated as follows:

  BASE TERMIN
  + PMTS OUTSTD
  + ASSM OUTSD
  + ADDL INTEREST
  + FEE/PENALTY

• NEW BOOK ACCOUNTING METH
  This field works in conjunction with the NEW DEPRS. METHOD listed below. This field allows the user to change the book accounting method from FIN to OPR, when the Change Depreciation at Term (Y/N) field in Miscellaneous Customizations is set to 'Y'. When a new method is selected, the residual value will be used as the inventoried value for the new depreciation method selected.
  
  For OPR terminations, the FMV default value will display the "Net Book Value". This amount will be used as the inventoried value for the new depreciation method selected.
  
  New G/L entries for OPR
  
  

Debit	Credit
Used Inventory (Undepreciated Amount)	Inventory
Used Inventory (Depreciated Amount)	Accumulated Depr-Used

New G/L entries for FIN

Debit	Credit
Used Inventory (Residual)	Inventory

Monthly transactions for OPR assets are made to Adjustments for Accumulated Deprecation

Debit	Credit
Depreciation Expense	Used Inventory

Note: This field is not supported when the Vehicle Finance module is purchased.

• NEW DEPRS. METHOD
  This field allows the user to select a new depreciation method for the termination and works in conjunction with the NEW BOOK ACCOUNTING METH field described above.
  

  The Used Inventory [R1001B] displays the detailed information for the terminated asset.
  
  Once the depreciation method or depreciation starting date has been modified for an asset in a previous lease extension or termination, it may not be modified again; an edit check in Change Asset [U0120] will notify the user.

Note: This field is not supported when the Vehicle Finance module is purchased.

This update will identify any remaining balances in the each record set of subvention entered by the user during lease booking for unearned income general ledger accounts. LeasePak will identify the subvention income on any remaining balances for each set or record of subvention unearned general ledger accounts. Termination will check for the unearned amounts, if any balances remains in the set of subvention unearned general ledger accounts, LeasePak will produce a general ledger entry to clear those unearned income balances. LeasePak will create the general ledger entries for the following:

The following is the sample general ledger entry is a termination transaction for a lease that has not matured.

General Ledger Account	Amount
DR IDRD - D/L SUBVENTION1	Remaining Balance - Termination Early
CR IDRD - D/L SUBVENTION1 INCOME

LeasePak creates the following general ledger transaction to clear any amounts in the suspended D/L suspended income accounts If the lease was suspended prior to termination:

General Ledger Account	Amount
DR IDRD - SUSP D/L SUBVENTION1 INC	Remaining Balance - Termination Early
CR IDRD - D/L SUBVENTION1 INCOME

LeasePak produces the same as above general ledger transactions if payoff is at asset level.

LeasePak creates the following sample general ledger termination transaction for an interest bearing loan that has not matured.

General Ledger Account	Amount
DR IDRD - RETAIL SUBVENTION1	Remaining Balance - Termination Early
CR IDRD - RETAIL SUBVENTION1 INC

LeasePak will create following general ledger transaction to clear any amounts in the suspended retail subvention income accounts If the interest bearing loan was suspended prior to termination:

General Ledger Account	Amount
DR IDRD - SUSP RETAIL SUBVENTION1 INC	Remaining Balance - Termination Early
CR IDRD - RETAIL SUBVENTION1 INC

 

For Dealer reserve, U0103 termination will first checks and makes sure that all the dealer reserve payables have been disbursed before LeasePak payoff’s for each asset. When processing termination LeasePak checks that whether or not a dealer reserve chargeback needs to occur and the amount of the chargeback.

When LeasePak process termination for dealer reserve, after the effective date user clicks on the OK button, LeasePak determines that if a chargeback and its amount is required for the asset or lease. If the amount of chargeback is greater than zero, LeasePak prompts following error message:

                         "A dealer reserve chargeback will occur when this transaction is committed."

Users can proceed with the update by the click on OK button or can click on Cancel button to stop processing with the effective date on and can stop processing update. U0103 payoff only chargeback once transaction completes.

If user clicks on OK button U0103 Termination proceeds processing transaction, accepts the inputs for termination, and assumes that chargeback has been committed and dealer reserved has been reduced. At the last screen when user commits changes to terminate lease or an asset LeasePak first process the chargeback, then terminate an asset or a lease, and update U0103 processing completes.

NOTE: If chargeback cannot find the transaction to reverse, LeasePak will not be able to terminate a specific asset or a lease. Otherwise, an error message prompts.

"Check record not found for chargeback. Transaction cancelled. The asset trying to perform a chargeback would need to be updated so that the dealer reserve plan code assigned to it does not trigger a chargeback before the payoff or termination can be completed."

LeasePak produces general ledger entries to record dealer reserve payoff or termination updates after processing any chargeback required and these will be the same as the IDC3 fixed rate reserves general ledger updates, except that they will use the new dealer reserve accounts. The dealer reserve accounts replace the IDC3 fixed rate reserve accounts for these transactions as listed below.

General ledger will made to maintain the records and transactions of dealer reserve to the corresponding insurance premium accounts when processing payoff or termination for dealer reserve. LeasePak adds the following dealer reserve accounts:

Additional dealer reserve accounts if dealer reserve is on a pre-computed lease or asset:

• IDC7 - UNAMORT D/L DEALER RESERVE
• IDC7 - AMORT D/L DEALER RESERVE
• IDC7 - D/L DEALER RESERVE PAYABLE
• IDC7 - D/L SUSP DEALER RESERVE

Additional dealer reserve accounts if dealer reserve is on an operating lease or asset:

• IDC7 - UNAMORT O/L DEALER RESERVE
• IDC7 - AMORT O/L DEALER RESERVE
• IDC7 - O/L DEALER RESERVE PAYABLE
• IDC7 - O/L SUSP DEALER RESERVE

Additional dealer reserve accounts if dealer reserve is on an interest bearing loan lease or asset:

• IDC7 - UNAMORT DEALER RESERVE
• IDC7 - AMORT DEALER RESERVE
• IDC7 - DEALER RESERVE PAYABLE
• IDC7 - SUSP DEALER RESERVE

NOTE: If user attempts to payoff or terminate one asset, the amount of the dealer reserve payoff or termination general ledger transactions for that asset will be in the same proportion as the asset’s dealer reserve amount to the total amount of dealer reserve on the lease.

Apply Termination or Place in Suspense

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

• EXCHANGE ID
  For Like-Kind Exchange users only: This is an alphanumeric (ASCII character) field with a maximum length of 20 characters. There are no edit checks for users' input to this field. For more information on Exchange ID, refer to the overview document Like-Kind Exchange.
  
  
• SELECT ONE OPTION
  Select either to payoff the selected lease or asset, or you can put the amount in suspense.
  
  
• APPLY TERMINATION
  Terminates the specified lease or asset.
  
  
• PLACE TOTAL AMOUNT RECEIVED INTO SUSPENSE
  Places the entire received amount in suspense. Selecting this option makes available the Type, Follow up date and Comments fields. Entering the value for these fields is optional.
  
  
• TYPE
  Enter or select using the suspense type.
  
  
• FOLLOW UP DATE
  Enter the follow up date for this suspense.
  
  
• COMMENTS
  Enter comments for the suspense item.

Vertex O Users Only: When an asset or lease is terminated, LeasePak brings back assets into inventory for sale in the future. If an invoice is created, the invoice will be a Q or P type, which has no tax and is not reported to Vertex O. Any payments received and applied to open invoices will be processed the same way payments are processed through U0102 payments. Any base termination amount, fee, or additional interest charged as part of the termination is not taxed in LeasePak and no invoice tax journal entries are created. For this transaction, this invoice is not reported to the taxing authorities. Because the termination base amount is made up of outstanding invoice balances, which have already, been reported and taxed.

If the base termination amount is not equal to zero when confirming with OK button to proceed to apply Termination, LeasePak prompts a warning message:

"The base termination amount will not be taxed or reported to Vertex O. Any amount that needs to be taxed and reported should be assessed using U0105 Assessments."

Click Ok if you want to proceed or Click Cancel to cancel termination process.

 

Termination Overage/Shortage

• Overage
• Shortage

 

Overage

This screen is used for both lease and asset terminations. It is used to indicate the distribution of the termination overage. It appears if the TOTAL RECD is greater than the TOTAL TERMINATION. The overage is displayed on the screen and is reduced by each amount that is entered.

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

• TERMINATION OVERAGE
  The overage amount is displayed.

• GAIN ON SALE
  Enter the amount of the overage that is to be retained and recorded as a gain on sale. It must be less than or equal to TERMINATION OVERAGE.

• PLACE IN SUSPENSE
  Enter the amount of the overage that is to be placed into suspense to be researched and processed later. The amount entered must be less than or equal to the TERMINATION OVERAGE. If the Multiple Banks module has been purchased, the bank code entered for the payment will be used to process the suspense item. The bank code on this screen is used for processing a refund check.

• COMMENTS
  If an amount is placed in suspense, comments to be associated with that suspense item may be entered.
  
  
• REFUND CHECK
  Enter the amount of the overage that is to be returned to the lessee through a cashier's check. The amount entered must be less than or equal to the TERMINATION OVERAGE.

• REFERENCE
  If an amount in REFUND CHECK is entered, a reference associated with the check may be entered.

• BANK CODE
  This field will appear if the Multiple Banks module has been purchased. It allows the user to specify which bank should be used to process the refund. It is not used in the processing of a suspense item (if specified). The default bank code is 126; valid entries are 1, 125-144, or 499-520. Help is available.
  
  
• DISB DATE
  If an amount for the REFUND CHECK is entered, the disbursement date of the check may be entered in MM/DD/YY or DD/MM/YY format, depending on the Date Format Preference field in Security [U0706]. DISB DATE must be on or after the current date.

 

Shortage

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

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

• TERMINATION SHORTAGE
  
  
• LOSS ON SALE
  Enter the amount of the shortage to be recorded as a loss on sale. The amount entered must be less than or equal to TERMINATION SHORTAGE.
  
  
• ALLOWANCE FOR BAD DEBT
  Enter the amount of the shortage that is to be charged against the allowance for bad debt account. (A percentage of the contract receivable for each new lease may be set aside as allowance for bad debt during lease booking.) The amount entered is subtracted from the TERMINATION SHORTAGE, and so must be less than or equal to the current TERMINATION SHORTAGE.

  When the Off-Lease Billing module is purchased, this field will be accessible for both lese and asset terminations/Terminations.

• INVOICE (RENT)
  This field appears when the Off-Lease Billing module is purchased and works in conjunction with the PAYOFF INVOICE DUE DAYS switch in the Miscellaneous Customizations option of the Custom General [U0712] update.

  In order for the shortage amount to be billed, the user must enter the total amount to invoice. The default value of loss on Sale is Total Shortage amount based on LeasePak's calculated base payoff amount.

  The Payoff cannot be reversed if 'P' for asset payoff or 'Q' for lease payoff type invoice is partially or fully paid. 'P' and 'Q' type invoices cannot be removed by accrual reversal and must be removed by Payoff Reversal.

  The new invoice can be viewed through the Account Receivable Balancing Report [R0404] with 'P' or 'Q' in front of the lease number.

  For lease Payoff, defaulted form the Payoff Quote Base Payoff reflects the amount on the invoice with type P (Asset Payoff Invoice) also included in the Outstanding Payment in Payoff if the new 'Exclude Past Due Payment and Assessment Y/N switch is set to N. The invoice generated in Payoff will calculate sales tax if the switch CALCULATE SALES TAX ON PAYOFF is set to Y in the Lease Form [U0721]. The Rent amount in 'P' and 'Q' type invoices may be waived through Payment/Principal Waiver [U0102].

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

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

 

Asset Termination - Payment Reschedule

• Confirm Payment Schedule

 

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

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

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

• ACQUISITION COST - CURRENT/NEW
  The new acquisition cost is calculated and displayed. It is calculated by subtracting the acquisition cost of the paid off asset from the acquisition cost of the lease.

• OTHER CHARGES - CURRENT/NEW
  Other charges are calculated and displayed. They are calculated by subtracting other charges for the paid off asset from other charges for the lease.

• RESIDUAL - CURRENT/NEW
  The new residual is calculated and displayed. It is calculated by subtracting the residual of the paid off asset from the residual of the lease.

• CONTRACT RECEIVABLE - CURRENT/NEW
  The new contract receivable is displayed once the new payment schedule is entered. (This field is not applicable to operating leases or interest bearing loans.)

• TOTAL UNEARNED - CURRENT/NEW
  The new total unearned income is displayed once the new payment schedule is entered. (This field is not applicable to operating leases or interest bearing loans.)

• NET INVESTMENT - CURRENT/NEW
  The new net investment is displayed once the new payment schedule is entered. For interest bearing loans, NET INVESTMENT is the amount of principal outstanding. (This field is not applicable to operating leases.)

• LESSOR YIELD - CURRENT/NEW
  The new lessor yield is displayed once the new payment schedule is entered. For interest bearing loans, yield is only calculated for P&I accrual methods; it is not calculated for P+I accrual methods.

• REMAINING PAYMENT RESCHEDULE GRID
  The remaining payment schedule grid, based on the number of lease payments already accrued, is displayed.
  
  



Refer to Payment Schedule overview document for description of remaining payment schedule grid columns and values.

 

Confirm Payment Schedule

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

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

General Ledger

Following are the general ledger transaction for additional IDC fields (IDC8–IDC9 and IDCA–IDCH) during payoff:

For a precomputed type of lease:

Debit		Credit
524	IDC8–D/L RESERVES PAYABLE	523	IDC8–UNAMORT D/L RESERVES
523	IDC8–UNAMORT D/L RESERVES	624	IDC8 AMORTIZATION
624	IDC8 AMORTIZATION (additional transaction for suspended lease only during termination)	634	IDC8 – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
644	IDC8 – TOTAL RESERVES PAYABLE	524	IDC8–D/L RESERVES PAYABLE
528	ALT:IDC8–RESERVES PAYABLE	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT
527	ALT:IDC8–UNAMORT RESERVES	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
532	IDC9–D/L RESERVES PAYABLE	531	IDC9–UNAMORT D/L RESERVES
531	IDC9–UNAMORT D/L RESERVES	625	IDC9 – AMORTIZATION
625	IDC9 AMORTIZATION (additional transaction for suspended lease only during termination)	635	IDC9 – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
645	IDC9 – TOTAL RESERVES PAYABLE	532	IDC9–D/L RESERVES PAYABLE
536	ALT:IDC9–RESERVES PAYABLE	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT
525	ALT:IDC9–UNAMORT RESERVES	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
540	IDCA–D/L RESERVES PAYABLE	539	IDCA–UNAMORT D/L RESERVES
539	IDCA–UNAMORT D/L RESERVES	626	IDCA AMORTIZATION
626	IDCA AMORTIZATION (additional transaction for suspended lease only during termination)	636	IDCA – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
646	IDCA – TOTAL RESERVES PAYABLE	540	IDCA–D/L RESERVES PAYABLE
544	ALT:IDCA–RESERVES PAYABLE	656	IDCA – ALT:LEASE INCOME ADJUSTMENT
543	ALT:IDCA–UNAMORT RESERVES	656	IDCA – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
548	IDCB–D/L RESERVES PAYABLE	547	IDCB–UNAMORT D/L RESERVES
547	IDCB–UNAMORT D/L RESERVES	627	IDCB AMORTIZATION
627	IDCB AMORTIZATION (additional transaction for suspended lease only during termination)	637	IDCB – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
647	IDCB – TOTAL RESERVES PAYABLE	548	IDCB–D/L RESERVES PAYABLE
552	ALT:IDCB–RESERVES PAYABLE	657	IDCB – ALT:LEASE INCOME ADJUSTMENT
551	ALT:IDCB–UNAMORT RESERVES	657	IDCB – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
556	IDCC–D/L RESERVES PAYABLE	555	IDCC–UNAMORT D/L RESERVES
555	IDCC–UNAMORT D/L RESERVES	628	IDCC AMORTIZATION
628	IDCC AMORTIZATION (additional transaction for suspended lease only during termination)	638	IDCC – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
648	IDCC – TOTAL RESERVES PAYABLE	556	IDCC–D/L RESERVES PAYABLE
560	ALT:IDCC–RESERVES PAYABLE	658	IDCC – ALT:LEASE INCOME ADJUSTMENT
559	ALT:IDCC–UNAMORT RESERVES	658	IDCC – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
564	IDCD–D/L RESERVES PAYABLE	563	IDCD–UNAMORT D/L RESERVES
563	IDCD–UNAMORT D/L RESERVES	629	IDCD AMORTIZATION
629	IDCD AMORTIZATION (additional transaction for suspended lease only during termination)	639	IDCD – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
649	IDCD – TOTAL RESERVES PAYABLE	564	IDCD–D/L RESERVES PAYABLE
568	ALT:IDCD–RESERVES PAYABLE	659	IDCD – ALT:LEASE INCOME ADJUSTMENT
557	ALT:IDCD–UNAMORT RESERVES	659	IDCD – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
572	IDCE–D/L RESERVES PAYABLE	571	IDCE–UNAMORT D/L RESERVES
571	IDCE–UNAMORT D/L RESERVES	630	IDCE AMORTIZATION
630	IDCE AMORTIZATION(additional transaction for suspended lease only during termination)	640	IDCE – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
650	IDCE – TOTAL RESERVES PAYABLE	572	IDCE–D/L RESERVES PAYABLE
576	ALT:IDCE–RESERVES PAYABLE	660	IDCE – ALT:LEASE INCOME ADJUSTMENT
575	ALT:IDCE–UNAMORT RESERVES	660	IDCE – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
580	IDCF–D/L RESERVES PAYABLE	579	IDCF–UNAMORT D/L RESERVES
579	IDCF–UNAMORT D/L RESERVES	631	IDCF AMORTIZATION
631	IDCF AMORTIZATION (additional transaction for suspended lease only during termination)	641	IDCF – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
651	IDCF – TOTAL RESERVES PAYABLE	580	IDCF–D/L RESERVES PAYABLE
584	ALT:IDCF–RESERVES PAYABLE	661	IDCF – ALT:LEASE INCOME ADJUSTMENT
583	ALT:IDCF–UNAMORT RESERVES	661	IDCF – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
588	IDCG–D/L RESERVES PAYABLE	587	IDCG–UNAMORT D/L RESERVES
587	IDCG–UNAMORT D/L RESERVES	632	IDCG AMORTIZATION
632	IDCG AMORTIZATION (additional transaction for suspended lease only during termination)	642	IDCG – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
652	IDCG – TOTAL RESERVES PAYABLE	588	IDCG–D/L RESERVES PAYABLE
592	ALT:IDCG–RESERVES PAYABLE	662	IDCG – ALT:LEASE INCOME ADJUSTMENT
591	ALT:IDCG–UNAMORT RESERVES	662	IDCG – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
596	IDCH–D/L RESERVES PAYABLE	595	IDCH–UNAMORT D/L RESERVES
595	IDCH–UNAMORT D/L RESERVES	633	IDCH AMORTIZATION
633	IDCH AMORTIZATION (additional transaction for suspended lease only during termination)	643	IDCH – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
653	IDCH – TOTAL RESERVES PAYABLE	596	IDCH–D/L RESERVES PAYABLE
600	ALT:IDCH–RESERVES PAYABLE	663	IDCH – ALT:LEASE INCOME ADJUSTMENT
599	ALT:IDCH–UNAMORT RESERVES	663	IDCH – ALT:LEASE INCOME ADJUSTMENT

For an operating type of lease:

Debit		Credit
526	IDC8–D/L – O/L RESERVES PAYABLE	525	IDC8–UNAMORT D/L – O/L RESERVES
525	IDC8–UNAMORT D/L–O/L RESERVES	624	IDC8 AMORTIZATION
624	IDC8 AMORTIZATION(additional transaction for suspended lease only during termination)	634	IDC8 – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
644	IDC8 – TOTAL RESERVES PAYABLE	526	IDC8–D/L – O/L RESERVES PAYABLE
528	ALT:IDC8–RESERVES PAYABLE	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT
527	ALT:IDC8–UNAMORT RESERVES	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
534	IDC9–D/L – O/L RESERVES PAYABLE	533	IDC9–UNAMORT D/L – O/L RESERVES
534	IDC9–UNAMORT D/L – O/L RESERVES	625	IDC9 AMORTIZATION
625	IDC9 AMORTIZATION (additional transaction for suspended lease only during termination)	635	IDC9 – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
645	IDC9 – TOTAL RESERVES PAYABLE	534	IDC9–D/L – O/L RESERVES PAYABLE
536	ALT:IDC9–RESERVES PAYABLE	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT
535	ALT:IDC9–UNAMORT RESERVES	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
542	IDCA–D/L–O/L RESERVES PAYABLE	541	IDCA–UNAMORT D/L – O/L RESERVES
541	IDCA–UNAMORT D/L – O/L RESERVES	626	IDCA AMORTIZATION
626	IDCA AMORTIZATION (additional transaction for suspended lease only during termination)	636	IDCA – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
646	IDCA – TOTAL RESERVES PAYABLE	542	IDCA–D/L – O/L RESERVES PAYABLE
544	ALT:IDCA–RESERVES PAYABLE	656	IDCA –ALT:LEASE INCOME ADJUSTMENT
543	ALT:IDCA–UNAMORT RESERVES	656	IDCA – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
550	IDCB–D/L – O/L RESERVES PAYABLE	549	IDCB–UNAMORT D/L – O/L RESERVES
549	IDCB–UNAMORT D/L – O/L RESERVES	627	IDCB AMORTIZATION
627	IDCB AMORTIZATION(additional transaction for suspended lease only during termination)	637	IDCB – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
647	IDCB – TOTAL RESERVES PAYABLE	550	IDCB–D/L – O/L RESERVES PAYABLE
552	ALT:IDCB–RESERVES PAYABLE	657	IDCB – ALT:LEASE INCOME ADJUSTMENT
551	ALT:IDCB–UNAMORT RESERVES	657	IDCB – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
558	IDCC–D/L – O/L RESERVES PAYABLE	557	IDCC–UNAMORT D/L – O/L RESERVES
557	IDCC–UNAMORT D/L – O/L RESERVES	628	IDCC AMORTIZATION
628	IDC AMORTIZATION (additional transaction for suspended lease only during termination)	638	IDCC – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
648	IDCC – TOTAL RESERVES PAYABLE	558	IDCC–D/L – O/L RESERVES PAYABLE
560	ALT:IDCC–RESERVES PAYABLE	658	IDCC – ALT:LEASE INCOME ADJUSTMENT
559	ALT:IDCC–UNAMORT RESERVES	658	IDCC – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
566	IDCD–D/L – O/L RESERVES PAYABLE	565	IDCD–UNAMORT D/L – O/L RESERVES
565	IDCD–UNAMORT D/L – O/L RESERVES	629	IDCD AMORTIZATION
629	IDCD AMORTIZATION (additional transaction for suspended lease only during termination)	639	IDCD – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
649	IDCD – TOTAL RESERVES PAYABLE	566	IDCD–D/L – O/L RESERVES PAYABLE
568	ALT:IDCD–RESERVES PAYABLE	659	IDCD – ALT:LEASE INCOME ADJUSTMENT
567	ALT:IDCD–UNAMORT RESERVES	659	IDCD – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
574	IDCE–D/L – O/L RESERVES PAYABLE	573	IDCE–UNAMORT D/L – O/L RESERVES
573	IDCE–UNAMORT D/L – O/L RESERVES	630	IDCE AMORTIZATION
630	IDCE AMORTIZATION (additional transaction for suspended lease only during termination)	640	IDCE – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
650	IDCE – TOTAL RESERVES PAYABLE	574	IDCE–D/L – O/L RESERVES PAYABLE
576	ALT:IDCE–RESERVES PAYABLE	660	IDCE – ALT:LEASE INCOME ADJUSTMENT
575	ALT:IDCE–UNAMORT RESERVES	660	IDCE – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
582	IDCF–D/L –O/L RESERVES PAYABLE	581	IDCF–UNAMORT D/L – O/L RESERVES
581	IDCF–UNAMORT D/L – O/L RESERVES	631	IDCF AMORTIZATION
631	IDCF AMORTIZATION (additional transaction for suspended lease only during termination)	641	IDCF – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
651	IDCF – TOTAL RESERVES PAYABLE	582	IDCF–D/L – O/L RESERVES PAYABLE
584	ALT:IDCF–RESERVES PAYABLE	661	IDCF – ALT:LEASE INCOME ADJUSTMENT
583	ALT:IDCF–UNAMORT RESERVES	661	IDCF – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
590	IDCG–D/L – O/L RESERVES PAYABLE	589	IDCG–UNAMORT D/L – O/L RESERVES
589	IDCG–UNAMORT D/L – O/L RESERVES	632	IDCG AMORTIZATION
632	IDCG AMORTIZATION (additional transaction for suspended lease only during termination)	642	IDCG – SUSPENDED AMORTIZATION(additional transaction for suspended lease only during termination)
652	IDCG – TOTAL RESERVES PAYABLE	590	IDCG–D/L – O/L RESERVES PAYABLE
592	ALT:IDCG–RESERVES PAYABLE	662	IDCG – ALT:LEASE INCOME ADJUSTMENT
591	ALT:IDCG–UNAMORT RESERVES	662	IDCG – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
598	IDCH–D/L – O/L RESERVES PAYABLE	597	IDCH–UNAMORT D/L – O/L RESERVES
597	IDCH–UNAMORT D/L – O/L RESERVES	633	IDCH AMORTIZATION
633	IDCH AMORTIZATION (additional transaction for suspended lease only during termination)	643	IDCH – SUSPENDED AMORTIZATION (additional transaction for suspended lease only during termination)
653	IDCH – TOTAL RESERVES PAYABLE	598	IDCH–D/L – O/L RESERVES PAYABLE
600	ALT:IDCH–RESERVES PAYABLE	663	IDCH – ALT:LEASE INCOME ADJUSTMENT
599	ALT:IDCH–UNAMORT RESERVES	663	IDCH – ALT:LEASE INCOME ADJUSTMENT

For an interest bearing loan type of lease:

Debit		Credit
522	IDC8–RESERVES PAYABLE	521	IDC8–UNAMORTIZED RESERVES
521	IDC8–UNAMORTIZED RESERVES	604	IDC8 – FASB91 INCOME ADJUSTMENT
604	IDC8 – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	614	IDC8 – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
644	IDC8 – TOTAL RESERVES PAYABLE	522	IDC8–RESERVES PAYABLE
528	ALT:IDC8–RESERVES PAYABLE	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT
527	ALT:IDC8–UNAMORT RESERVES	654	IDC8 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
530	IDC9–RESERVES PAYABLE	529	IDC9–UNAMORTIZED RESERVES
529	IDC9–UNAMORTIZED RESERVES	605	IDC9 – FASB91 INCOME ADJUSTMENT
605	IDC9 – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	6015	IDC9 – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
645	IDC9 – TOTAL RESERVES PAYABLE	530	IDC9–RESERVES PAYABLE
536	ALT:IDC9–RESERVES PAYABLE	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT
535	ALT:IDC9–UNAMORT RESERVES	655	IDC9 – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
538	IDCA–RESERVES PAYABLE	537	IDCA–UNAMORTIZED RESERVES
537	IDCA–UNAMORTIZED RESERVES	606	IDCA – FASB91 INCOME ADJUSTMENT
606	IDCA – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	616	IDCA – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
646	IDCA – TOTAL RESERVES PAYABLE	538	IDCA–RESERVES PAYABLE
544	ALT:IDCA–RESERVES PAYABLE	656	IDCA – ALT:LEASE INCOME ADJUSTMENT
543	ALT:IDCA–UNAMORT RESERVES	656	IDCA – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
546	IDCB–RESERVES PAYABLE	545	IDCB–UNAMORTIZED RESERVES
545	IDCB–UNAMORTIZED RESERVES	607	IDCB – FASB91 INCOME ADJUSTMENT
607	IDCB – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	617	IDCB – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
647	IDCB – TOTAL RESERVES PAYABLE	546	IDCB–RESERVES PAYABLE
552	ALT:IDCB–RESERVES PAYABLE	657	IDCB – ALT:LEASE INCOME ADJUSTMENT
551	ALT:IDCB–UNAMORT RESERVES	657	IDCB – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
554	IDCC–RESERVES PAYABLE	553	IDCC–UNAMORTIZED RESERVES
553	IDCC–UNAMORTIZED RESERVES	608	IDCC – FASB91 INCOME ADJUSTMENT
608	IDCC – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	618	IDCC – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
648	IDCC – TOTAL RESERVES PAYABLE	554	IDCC–RESERVES PAYABLE
560	ALT:IDCC–RESERVES PAYABLE	658	IDCC – ALT:LEASE INCOME ADJUSTMENT
559	ALT:IDCC–UNAMORT RESERVES	658	IDCC – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
562	IDCD–RESERVES PAYABLE	561	IDCD–UNAMORTIZED RESERVES
561	IDCD–UNAMORTIZED RESERVES	609	IDCD – FASB91 INCOME ADJUSTMENT
609	IDCD – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	619	IDCD – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
649	IDCD – TOTAL RESERVES PAYABLE	562	IDCD–RESERVES PAYABLE
568	ALT:IDCD–RESERVES PAYABLE	659	IDCD – ALT:LEASE INCOME ADJUSTMENT
567	ALT:IDCD–UNAMORT RESERVES	659	IDCD – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
570	IDCE–RESERVES PAYABLE	569	IDCE–UNAMORTIZED RESERVES
569	IDCE–UNAMORTIZED RESERVES	610	IDCE – FASB91 INCOME ADJUSTMENT
610	IDCE – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	620	IDCE – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
650	IDCE – TOTAL RESERVES PAYABLE	570	IDCE–RESERVES PAYABLE
576	ALT:IDCE–RESERVES PAYABLE	660	IDCE – ALT:LEASE INCOME ADJUSTMENT
575	ALT:IDCE–UNAMORT RESERVES	660	IDCE – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
578	IDCF–RESERVES PAYABLE	577	IDCF–UNAMORTIZED RESERVES
577	IDCF–UNAMORTIZED RESERVES	611	IDCF – FASB91 INCOME ADJUSTMENT
611	IDCF – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	621	IDCF – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
651	IDCF – TOTAL RESERVES PAYABLE	578	IDCF–RESERVES PAYABLE
584	ALT:IDCF–RESERVES PAYABLE	661	IDCF – ALT:LEASE INCOME ADJUSTMENT
583	ALT:IDCF–UNAMORT RESERVES	661	IDCF – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
586	IDCG–RESERVES PAYABLE	585	IDCG–UNAMORTIZED RESERVES
585	IDCG–UNAMORTIZED RESERVES	612	IDCG – FASB91 INCOME ADJUSTMENT
612	IDCG – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	622	IDCG – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
652	IDCG – TOTAL RESERVES PAYABLE	586	IDCG–RESERVES PAYABLE
592	ALT:IDCG–RESERVES PAYABLE	662	IDCG – ALT:LEASE INCOME ADJUSTMENT
591	ALT:IDCG–UNAMORT RESERVES	662	IDCG – ALT:LEASE INCOME ADJUSTMENT

Debit		Credit
594	IDCH–RESERVES PAYABLE	593	IDCH–UNAMORTIZED RESERVES
593	IDCH–UNAMORTIZED RESERVES	613	IDCH – FASB91 INCOME ADJUSTMENT
613	IDCH – FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)	623	IDCH – SUSP FASB91 INCOME ADJUSTMENT (additional transaction for suspended lease only during termination)
653	IDCH – TOTAL RESERVES PAYABLE	594	IDCH–RESERVES PAYABLE
600	ALT:IDCH–RESERVES PAYABLE	663	IDCH – ALT:LEASE INCOME ADJUSTMENT
599	ALT:IDCH–UNAMORT RESERVES	663	IDCH – ALT:LEASE INCOME ADJUSTMENT

IDC ASC 842:

U0103 Termination supports the IDC ASC 842 amount. Termination update will produce the following general ledger transaction for IDC ASC 842:

Debit		Credit
669	IDC AMORTIZATION – ASC 842	666	UNAMORTIZED IDC COST – ASC 842

 

Termination Reversal

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

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

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

Reversing Lease Terminations

Lease termination reversal can be performed in the reverse order of termination i.e. if asset terminated then lease terminated the reversal should be performed on lease termination first and then on asset termination.

If a lease was terminated by the Auto Charge Off/Suspended Earnings module, then the field Auto Charge Off in the Lease (RLS) file will be replaced with Y.

Reversing Asset Terminations

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

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

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

Like-Kind Exchange

For Like-Kind Exchange users only: The enhancement will add the function that when users enter the lease or asset number (including Asset Focus leases and assets) to perform a termination reversal, LeasePak will check to see if corresponding rlk records exist. If the program finds corresponding rlk records, it will display the warning message information users about the found records.

Where will identify the lease or asset. If the user clicks OK, the program will remove the corresponding rlk records as part of the termination reversal:

• For a lease-level reversal, this means all rlk records with a matching Lease of relinquished asset number (relinq_lse_s)
• For an asset-level reversal, this means all rlk records with a matching Relinquishment asset number (relinq_unit_s)

If the user clicks Cancel, the program will continue processing the termination reversal, but leave the corresponding rlk records in place. For more information, refer to the overview document Like-Kind Exchange.

 

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

 

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

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

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

 

NOTE: U0103 Termination Reversal process dealer reserve same as IDC3 fixed rate reserve processes transactions. If chargeback completes either during or prior to payoff, termination not equal to than the following informational message will appears:

                                      "Dealer reserve chargeback have occurred. Reserve chargeback through U0238."

For Vertex O users only: To reverse an asset termination, LeasePak first confirms that the asset has a valid tax area ID if the lease is a Vertex O lease. If the tax area ID does not exist on the asset and the lease indicates that it is a Vertex O lease, then the asset termination reversal is not possible.

 

Reverse Lease Termination

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

For Off-Lease Billing users only: During a full lease termination reversal (not a partial or asset termination reversal), if the lease is not found extended on a cash basis and the switch RECOGNIZE CASH-BASIS INVOICE INCOME AT PAYOFF in the Miscellaneous Customizations option of the Custom General [U0712] update is turned on, the program will put the lease back into the cash basis and reverse the income and residual reduction entered for the open invoices as if the payment that never happened was being reversed without duplicating the receivable that is still there.

Also supports Asset Focus Module.

NOTE: For charge-Off U0103 Payoff or Termination Reversal disallow a lease with an activity status of either NCxx or NPxx that has been changed keyed into a deficiency portfolio from being reversed.

"The lease has been moved to a different PCRO. Please perform a lease change key."

• SECURITY DEPOSIT AMOUNT
  The amount of the security deposit used for the termination is displayed.

• SUSPENSE AMOUNT (CLEARED)
  The amount of any suspense item used for the termination is displayed.

• CLEARED ITEM NUMBER
  The suspense item number, if suspense was used, is displayed.

• CHECK AMOUNT
  The amount of the check entered on the termination is displayed.

Check Number

(Conditional)

The check number is required, if:

1. Cash Control module is running.
2. The termination amount received is greater than 0.

If you have specified a suspense item for the payment, LeasePak will set this field to the check number specified for the suspense item. It will also make this field become unavailable and uneditable.

LeasePak will store the check number in the Monthly Transaction (RTX), Check Payment Master (RPM) and Check Payment Detail (RPN) files. A trace reference will be created based on thePayment Originationcode: 'LPBK' for Book Lease [U0101]. The trace reference will be displayed in the Cash Control Payment History [R0926] report. The check number will appear on R0411 Cash Receipts Journal, as well as any other reports that include the check number.

• LOSS
  Any amount recorded as a loss on termination is displayed.

• REASON CODE
  Select the reason code for the termination reversal. Use the Help menu for a list of valid codes. This field is required for processing the termination reversal.

• BAD DEBT
  Any amount recorded as a debit to the allowance for bad debt account is displayed.

• INVOICE RENT
  Any rent invoiced by the termination is displayed.

• SUSPENSE AMOUNT (ENTERED)
  Any termination overpayment that was placed in suspense is displayed.

• ENTERED ITEM NUMBER
  The suspense item number that was assigned to the SUSPENSE AMOUNT is displayed.

• CASHIER'S CHECK AMOUNT
  Any amount of overpayment that was refunded to the lessee is displayed.

• GAIN
  Any amount of overpayment that was retained as a gain on termination is displayed.

• TOTAL TERMINATION AMOUNT
  The total amount of the termination is displayed.

• DO YOU WISH TO PROCESS THIS TERMINATION REVERSAL (Y/N)?
  Entering Y and clicking OK processes the termination reversal. Entering N and clicking OK returns the user to the previous screen.
  

 

Reverse Asset Termination

• Payment Reschedule
• Confirm Payment Schedule

 

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

• SECURITY DEPOSIT AMOUNT
  The amount of the security deposit used for the termination is displayed.

• SUSPENSE AMOUNT (CLEARED)
  The amount of any suspense item used for the termination is displayed.

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

NOTE: For Charge-Off U0103 Sale of asset reversal disallow asset reversal of an asset that was sold prior to the lease change key for the leases with an activity status of either NCxx or NPxx that are tied to those asset. For such type of sale of asset reversal LeasePak prompts the user with an error message and discontinue to process. Change key is necessary for the asset that has been moved to a different PCRO.

"The asset has been moved to a different PCRO. Please perform a lease change key."

 

Payment Reschedule

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

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

• ACQUISITION COST - CURRENT/NEW
  The new acquisition cost is calculated and displayed. It is calculated by adding the acquisition cost of the paid off asset to the acquisition cost of the lease.

• OTHER CHARGES - CURRENT/NEW
  Other charges are calculated and displayed. The new charges are calculated by adding other charges for the asset paid off to other charges of the lease.

• RESIDUAL - CURRENT/NEW
  The new residual is calculated and displayed. It is calculated by adding the residual of the paid off asset and the residual of the remaining lease.

• TOTAL UNEARNED - CURRENT
  The current total unearned income is displayed.
  (Not applicable to operating leases.)

• NET INVESTMENT - CURRENT
  The current net investment is displayed.
  (Not applicable to operating leases.)

• LESSOR YIELD - CURRENT
  The current lessor yield is displayed.

• REMAINING PAYMENT RESCHEDULE GRID
  The remaining payment schedule grid, based on the number of lease payments already accrued, is displayed.
  
  



Refer to Payment Schedule overview document for description of remaining payment schedule grid columns and values.

 

Confirm Payment Schedule

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

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

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

  (Not applicable to operating leases.)

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

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

  (Not applicable to operating leases.)

• LESSOR YIELD - NEW
  The new lessor yield is calculated and displayed. Refer to the Calculations document for more information on yield calculations.

• DO YOU WISH TO USE THIS PAYMENT SCHEDULE (Y/N)?
  Entering Y and clicking on OK processes the termination reversal. Entering N and clicking on OK returns the user to the previous screen.

 

General Ledger

The termination reversal will produce the same general ledger transactions for the IDC fields as created at the time of lease termination and will also populate the rdt Dealer Transaction table for termination reversal.

IDC ASC 842:

U0103 Payoff Reversal supports the IDC ASC 842 amount. Payoff reversal will produce the following general ledger transaction for IDC ASC 842:

Debit		Credit
666	UNAMORTIZED IDC COST – ASC 842	669	IDC AMORTIZATION – ASC 842

–

LeasePak  Documentation Suite

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