Cash Flows for Amort Type Code 840 Leases Is Not Considering Residual Amount in Final Payment (Doc ID 3062448.1)

Last updated on DECEMBER 16, 2024

Applies to:

Goal

When running the ALM cash flow engine against Amortization Type Code 840 (Leases), it is expected that the RESIDUAL_AMOUNT to used to reduce the final principal amount in FE 210. However, the final payment amount reduces the full CUR_NET_PAR_BAL_C to zero. How to have the CFE reduce the total paid principal to CUR_NET_PAR_BAL_C less RESIDUAL_AMOUNT?

To add some more context, at the end of the lease there are three options:
• Customer walks away and returns the equipment (No cash flow, the asset stays on our books to be disposed of, but cannot be modeled for 2052a as part of this contract)
• Customer renews the contract at month to month (this is not contractual so again cannot be modeled for 2052a, no cash flow change)
• Customer buys the equipment (there will be a cash inflow but again since this is not contractual, it cannot be modeled for 2052a).

Solution

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