As a part of the new FASB and IASB regulations for Lease Accounting, Oracle PeopleSoft has developed a four-phase release of new and updated functionality to consolidate Asset Management and Lease Administration Leases into a single data structure. Lease Administration (formerly Real Estate Management) enables users to manage the entire lease lifecycle from planning and acquisition through lease expiration. Lease payments interface to payables, receivable to billing, and accounting entries to general ledger. In a recent PeopleSoft Talk, Marc Weintraub spoke with Loida Chez, Product Strategy Director for PeopleSoft ALM to detail these phases.
Phase 1 and 2 were a foundation to deliver functionality for leasing guidance
Phase 3 and 4 have new functionality to address debits and credits, as well as consolidate leases into single data structure.
Phase 1 – Image 10 (Foundation)
- Extended enterprise wide frameworks to Real Estate Management
- Tighter integration with Asset Management
Phase 2 – Image 19 (Foundation)
- Real Estate Management extended to allow for leasing of property and equipment, finance and operating
Phase 3 – Image 24 (Lessee Accounting)
- Multi-asset leases
- Dynamic lease classification at Asset level
- More precise data capture of financial terms
- Allocation of lease payments
Phase 4 – Image 27 (Migration and Transition)
- Introduction of Asset Management’s share product functionality with Lease Administration
- Activity Guide – Migrate Asset Management leases to common lease data structure
- Transition to new FASB and IASB leasing guide
Shared product functionality is huge, but is not Lease Administration. The following are not included:
- Receivables/Lessor Leases
- Operating Expenses/CAM
- Security Deposits
- Options & Critical Dats
- Site Selection & Acquisition
To utilize share functionality, utilize the following information detailed in the PeopleSoft Lease Accounting overview.
This shared functionality relates to core accounting requirements for payables leases. Shared product functionality does not require a Lease Administration license.
The first step to using the shared product functionality is migrating your AM to the Lease Administration data structure. A new Activity Guide enables you to perform all migration tasks. Select the Asset Management Lease data migration tasks from the left panel. They are divided into three phases – Initial Assessment of AM, Pre-migration Configuration, and Migration Process. Selecting the initial assessment allows you to review current assets. Since AM now shares functionality with LA, you have to configure common components including amendment types, role types, routing codes, and other configurations like Business Units. The tasks in the Pre-Migration section guide you through configuration changes required for migration. Once these are completed you are ready to migrate.
From the migration process section, you’ll migration AM leases to the LA data structure and review leases online after migration.
The activity guide serves as point to complete transition to the new accounting guidance.
Select “Preparing to Transition to the New Standard” to view guidance and with analytics review expected costs of operating leased assets on transition date.
Finally, you’ll update to “Transition to the new standard” to capitalize operating leases, transition leases to new accounting guidance, and transition to the corresponding straight-line schedule.
For more information on how Lease Administration or to speak with our Lease Administration team, email Practice Lead, Carlos Conde, at [email protected].