MY FAVORITE PEOPLESOFT LEASE ADMINISTRATION TRANSACTIONS, PART IV

MY FAVORITE PEOPLESOFT LEASE ADMINISTRATION TRANSACTIONS, PART IV

Hello again everyone! Welcome to Part IV, the final installment in the blog series, “My Favorite PeopleSoft Lease Administration Transactions.” In my previous blog, we took an in-depth look at the straight-line accounting entries. In Part IV, we will examine some of my favorite Lease Administration timesaving features.

GASB 87

New for Image 32 is support for GASB 87. Organizations are required to classify certain leases as a “Financed Purchase.” GASB 87 has eliminated the operating lease classification. The Financed Purchase rule is unique to GASB. Under this rule, organizations are required to report the liability for Financed Purchase leases in a GL liability account separate from the liability account used for other leases. To accommodate this new functionality, Lease Administration provides new Business Unit & Asset Management configuration to support the Financed Purchase account requirement.

With the new configuration in place, Lease Administration will now automatically direct the lease liabilities for Financed Purchase leases to a unique liability account. Lease liabilities for all other leases are automatically directed to a different liability account.   

From a user perspective the GASB 87 functionality will be seamless. Users will only be required to designate a lease as Financed Purchase. All accounting requirements will default automatically with no further user intervention required.

Direct Link between Lease ID, Asset ID and Journal Entries

With Lease Administration, there is direct link from the Lease ID, Asset ID and Journal Entries. This direct link allows for easy reporting for all your reporting & disclosure requirements directly from PeopleSoft Query using your lease data. This direct link also allows for easy online access to your journal entries directly from your leases. Below is a screen shot of the Financial Entry page from Lease Administration which illustrates the direct access to the Lease Journal Entries and Asset ID.

Manage Amendments – Remeasurement & Reclassification

When performing a Lease Amendment, PeopleSoft provides Remeasurement and Reassess Classification options which safeguard your financial data as needed. Select “Yes” for Remeasurement when performing amendments that impact financial data. With this setting, the system will remeasure your leases and optionally reassess lease classification. Select “No” when amending non-financial fields such as changing the lessor. The system will then lock down all the financial terms to help safeguard previous payments and journal entries.

Below are two screen shots of the Amendment Summary page demonstrating the two different settings discussed above.

Expire Leases

When a lease needs to be expired and the corresponding ROU leased asset(s) retired, Lease Administration provides direct integration with Asset Management. For users, the process is very simple and only requires selecting “Expire Lease” from the lease action menu to kick-off the process. The rest of the process integrates easily with the Asset Management Retirement page and does not require any complicated instructions.

Exempt Leases

This a newly added feature for Image 32. In addition to your ASC 842 leases, this feature allows you to include leases that you may want to exempt from the 842 rules. For example, you may have a 6 month short-term lease that you wish to by-pass the 842 rules. For this scenario, select the Exempt option to have these lease payments expensed directly instead of being capitalized. With this new feature in place, organizations will be better able to standardize lease payment procedures between 842 leases and short-term leases.

Sales & Use Tax and VAT

When working with Business Units and/or locations that have Sales, Use Tax or VAT, Lease Administration has full integration for all your tax-related configurations, options and default hierarchy. When vouchers are interfaced from Lease Administration to Accounts Payable, all tax processing will be calculated per your default settings. No additional user effort is required.

Ability to activate multiple leases at once

Also new for Image 32 is the ability to activate multiple leases at once. In prior versions, leases need to be activated one at a time. When activating leases at go-live, this new feature will be a great time saver during cutover.  It will also be very useful when creating multiple leases at once after go-live.

I hope that you find some of my Favorite Lease Administration features to be useful and great time savers. They are very good examples of integration between Lease Administration and other modules & configuration in your system. This now concludes the blog series, “My Favorite PeopleSoft Lease Administration Transactions.” As always, thank you for reading!

Steven Brenner, CPA
Senior Principal Consultant
MIPRO Consulting