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ELA: Lease Amendment Issue: Stepped Escalation Lease (Doc ID 2433192.1)

Last updated on AUGUST 08, 2018

Applies to:

PeopleSoft Enterprise FIN Lease Administration - Version 9.2 and later
Information in this document applies to any platform.

Goal

When extending a lease term via an amendment to a stepped lease, the results are incorrect.

Details:
Lease Operating
Rent Escalation Type: Stepped

Amendment:
Extend the Lease Term by 5 Years
Change the Borrowing Rate from 10 to 5%.

Expected Behavior:
-----------------------------
Expected ADJ Values are:

After the amendment the asset and the liability value are expected to be both 140,000 USD
(lease extended by 5 years, new borrowing rate of 5%)
· The liability
needs to adjusted by 68,162
· The asset needs
to be adjusted by 70,740 The difference of 2,578 needs to be recognized as
Rent Expense


Steps
-----------
This issue can be replicated by performing the following steps:

1) Create an operating Lease
2) Create Base Rent with Escalation type Stepped
3) Amend the lease to extend the term.
 

Solution

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