E1:15:Lease Payment Is Not Related To Amortization Schedule (R15170) (Doc ID 2578534.1)

Last updated on JUNE 01, 2023

Applies to:

Symptoms

Lease accounting appears to presume that whatever is calculated for an amortization schedule in a particular period is the same amount you should be paying the lease supplier that month.  In cases where a lease starts on anyother day than the first of a month, and assuming a Monthly payment frequency, then the first month's amortization amount is quite rightly prorated for the remaining days in the month - HOWEVER  the supplier is expecting a full monthly payment - not a prorated amount (whether it be an in-advance or in-arrears lease)  for that first month.  This means you end up generating (via recurring billing) an incorrect first and last month's payment amount.  This SAR is to request an enhancement that allows disconnect of the actual lease payment amount calculation from the amortization schedule itself.  see attached document for an example where a 12 month lease results in 13 payments being made to the supplier , when it should just be 12, and both the first and the last payment amounts are therefore incorrect.

Changes

Cause

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