There might come a time when you need to adjust a lease that is already Active - be it the payment amount, term, interest rate… All these changes can be done on an active lease and depending on the change done, remeasurements will be calculated to account for the change.
Let's go through how to make changes for an active lease.
Let's say the lease payment amount increases from 5000 to 5400 EUR after one year since the lease has started. The lease term for this lease is 48 months, starting on 01/01/2018.
First, from the Role Center, go into the Active Leases section and select the lease you want to adjust.
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The current payment amount for the selected lease is 5000 EUR with 200 EUR as non-lease component.
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On the active lease card, navigate to Actions → Re-open to enable the fields for editing.
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Adjust the Payment Amount field in the Payments tab to correspond to the new lease payment amount. In this example, the lease payment amount increases from 4800 to 5200 EUR.
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Updating the lease
You can essentially change any field on the lease, not just Payment Amount!
After making all necessary changes, select Actions → Confirm Updates.
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Change confirmation
Before selecting Confirm Updates, you can check out the payment, liability and RoU schedules to view how the change impacted the lease and what remeasurements were calculated for the lease. After you confirm the updates, you can post the updated value into the first unposted month.
Structured Schedule
When making payment changes to a lease that uses the Structured Schedule option always run the Recalculate action under Actions → Recalculate in the Lease Card so the liability and RoU schedules update accordingly.
The system will calculate and post lease remeasurement during the next recording of monthly transactions. You can view the calculated remeasurement before making any postings in the lease liability schedule.
These are the changes that happened in the example lease:
- Payment Schedule
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- Liability remeasurement in the Lease Liability Projection Schedule
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- Liability remeasurement in the G/L
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