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:Oracle Lease and Finance Management - Version 12.2.9 and later
Information in this document applies to any platform.
On : 12.2.9 version, Lease Authoring
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.
Expect the new accounting transaction to get created for the increased portion or the reversal for the booking transaction to happen.
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.
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