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New Early Lease Termination Scenario for GAAP Accounting (Doc ID 2731958.1)

Last updated on DECEMBER 02, 2020

Applies to:

Oracle Property Manager - Version 12.1.3 and later
Information in this document applies to any platform.


Below is the two expected business scenario on early lease termination process., based on GAAP Accounting, 

a)Full termination with payments continuing

Full Termination with obligation to pay all remaining lease payments:

b)Partial termination.

Partial Termination with obligation to pay all remaining lease payments:

Liability side would essentially account normally until 'Original End Date'., - each month this should be reduced by the payment and interest would get expensed
Asset: Asset would 'new termination date'  and the amortization of this asset would accelerate so that it’s fully amortized by this date.

Now instead of terminating the lease on a whole, we’d have to terminate only a portion of the rent. You’d see the escalation in amortization/rent expense related to this piece through Termination Date while payments remain the same. Oracle would have to give us an option on the payments tab to differentiate between something like a rent reduction and a terminated portion.


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