24B: Lease Amendments for Partial Scope Changes
(Doc ID 3017384.1)
Last updated on APRIL 24, 2024
Applies to:
Oracle Fusion Lease Accounting - Version 11.13.24.04.0 and laterInformation in this document applies to any platform.
Goal
Modify leases to increase or partially reduce the lessee's right to the underlying assets. Lease modifications to change scope include creating a new version of the lease, adjusting the right-of-use asset and lease liability on a basis proportionate to the partial scope change, and maintaining an audit of the changes.
An amendment to increase or partially reduce scope is accounted by remeasuring the lease liability and adjusting the carrying amount of the right-of-use asset. Additionally, a gain or loss is recognized when there is a decrease in scope. Scope decreases under IFRS 16 and Japanese GAAP are calculated based on the percentage of reduction in the leased area or units, whereas under ASC 842, they may optionally be calculated based on the percentage of reduction in lease liability.
The unit-based scope decrease method may be configured separately for primary and secondary standards under system options.
Alternatively, use the Lease Amendment Import utility to import a batch of partial scope increase or scope decrease amendments directly into the desired status: Draft, Validated, Complete, or Booked.
Solution
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