Guaranteed Residual Value And Lease Incentives-Fixed Asset's Lease (Doc ID 2637054.1)

Last updated on FEBRUARY 08, 2024

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Goal

There are couple of config related questions stated below with examples, can you please provide the steps to accommodate the following examples in fixed asset lease modules.

1. Guaranteed Residual value - In a finance lease when the contract terms state that at the end of the lease if the value of the asset is below a guaranteed residual value, then the lessee will have to make a payment for the difference. Example - if the guaranteed residual value was $10K and at the end of the lease asset is valued at $ 8K the lessee is bound to make a payment of 2K to the lessor. This can be dealt with one time payment at the time when lease is terminated, is this the only way to do it or there are other ways to do it?

Where can the guaranteed residual value be recorded in the lease module? and how can the guaranteed residual value be routed to appropriate account?

2. Lease incentive - In the event where lessee is entitled to a lease incentive where can the lease incentive be tracked in the lease creation page and how does the lease incentive get accounted in the system.
 

Solution

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