This activity is used to enter terms and conditions of a lease contract.
Category of the Terms and Conditions represents payments that are agreed upon with the lessor in the lease agreement and that are used in the calculation of present value of minimum lease payments. The possible values are as follows:
In the Type of Payment list, select the type of the periodical minimum lease payments agreed in the lease contract. This field is enabled if the Category is set to Standard Terms. The type of payments can be Fixed (i.e., the same payment amounts throughout the lease term) or Incremental (increased by a certain percentage or an amount from the first installment).
Enter the first installment amount of the periodical minimum lease payments in the Lease Amount field.
Enter fixed amounts that are included in the installment according to the lease agreement which are not considered for the calculation of the present value of minimum lease payments (PVMLP) in the Non-Lease Amount field. These amounts may represent payments for services, maintenance, or any other such fee. These amounts can be entered just for information purpose and will not be considered in any calculation or posting. Further, Non-Lease Amounts can be entered only for the Category, Standard Terms.
Enter the date on which the first periodical lease payment to be paid in the Payment Start Date field. Payment Start Date should not be equal to the Contract Start Date on the Lease Accounting Contract page if the Time of Payment in the General tab of the Lease Accounting Contract page is End of the period. If the Time of Payment is Beginning of the period, normally the Payment Start Date is equal to the Contract Start Date.
Enter the frequency of the periodical lease payments to be made in the Payment Interval field. This should be defined in Months. Example: If the periodical lease payments to be made Yearly, enter 12 in this field. If it will be paid Quarterly, enter 3 in this field and so on.
Change the No of Lease Installments suggested by the system based on the Payment Start Date and the Contract End Date on the Lease Accounting Contract page, if required. If you edit the value in this field, system calculates the Payment End Date automatically.
In order to enter information in the Terms and Conditions section, the general information must have been entered on the Lease Accounting Contract page.
As a result of this activity, terms and conditions of the lease contract are available for the Lease Accounting process.