Upfront Tax Accounting is Incorrect after a Rebook is Performed. Reversing for Booking Transaction not Happening. (Doc ID 2805017.1)

Last updated on SEPTEMBER 07, 2021

Applies to:

Symptoms

On : 12.2.9 version, Lease Authoring

ACTUAL BEHAVIOR
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Find that upfront tax accounting is incorrect after a rebook is performed.

An upfront tax contract is booked and as a result it creates a Upfront Tax Financed Fee line. As Upfront Tax is a seeded transaction type, it creates an accounting transaction with the Upfront Tax Finance Fee amount. So booking is correct.

However, when a rebook is performed and the cost of the asset is increased, as this contract is tax on cost (Upfront Cost Tax) obviously tax gets increased. As a result, the accounting transaction is getting created for total new tax amount and not just the increased portion and that's incorrect accounting.

EXPECTED BEHAVIOR
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Expect the new accounting transaction to get created for the increased portion or the reversal for the booking transaction to happen.

STEPS
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The issue can be reproduced at will with the following steps:
1. Using Lease Super User responsibility, ensure upfront tax is enabled for this OU.
2. Author a lease contract with upfront tax.
3. Book the contract and make sure the Tax Financed Fee line is created.
4. Check the accounting transaction for upfront tax.
5. Perform a rebook and adjust cost.
6. Proceed with the activation of the revised contract.
7. Check the accounting transaction for Upfront Tax, you will see a new accounting transaction is created for the new amount and not the adjusted amount.

Cause

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