IJ20977: ROU ASSET IS REMEASURED EVEN IF NOTHING IS CHANGED IN THE LEASE

APAR status

• Closed as fixed if next.

Error description

• Problem type:
  Application- Real Estate Manager -ROU asset is remeasured
  
  Found In Product Version:
  Reported and reproduced in 10.6.0.5. Check after 10.6.0.5
  release notes.
  
  Problem Title:
  ROU asset is remeasured even if nothing is changed in the lease
  
  
  Symptom/Description:
  Once a lease is activated, and a revision is made to the lease
  in the same fiscal period, even if no changes are made to the
  lease, TRIRIGA forces recalculation of accounting schedule, and
  the ROU asset is remeasured even if nothing is changed in the
  lease. Uncertain if this is tied to a bug with Initial Direct
  Costs disappearing upon Contract Revise and having to add back
  in.
  
  Steps to Reproduce (If Any):
  1. Navigate to the Real Estate Lease by selecting Contracts,
  then Leases, then Leases on the left side of the screen in the
  Related Links box under RE Contracts
  
  2. Click the ADD button to create a new lease
  
  3. Fill in required fields on the General Tab and make sure the
  lease term is 5 years
  
  â ¢ In this case the term is from 1/1/2019 â “ 12/31/2023
  
  4. Currency is US dollars
  
  5. Go to the Contacts Tab and add the required lease contacts
  and add a Remit To Organization
  
  6. Click the CREATE DRAFT button in the upper right hand corner
  
  7. Go to the Locations Tab
  
  8. Click the ADD button in the Premise Location Terms section
  
  9. Add a premise for 5,000 SQ FT and make sure the "Included in
  Rent" flag is checked (by default, it will be checked)
  
  10. Click the SAVE button in the upper right hand corner
  
  11. Go to the Payments Tab
  
  12. Click the GENERATE PAYMENT SCHEDULES button
  
  13. Create an Monthly Base Rent payment schedule for $205,000
  per month with a $20,000 annual escalation
  
  â ¢ Payment due day is the 1st
  
  â ¢ Be sure it's tied to your premise created in step 9
  
  â ¢ Payment Schedule is from 1/1/2019 â “ 12/31/2023
  
  14. Create a One Time Tenant Incentive for $100,000 received on
  12/31/2018 (prior to start of lease)
  
  â ¢ Be sure it's tied to your premise created in step 9
  
  â ¢ Payment Schedule From Date is 12/31/2018
  
  15. Click the SUBMIT FOR ACCOUNTING REVIEW button in the upper
  right hand corner
  
  16. System will close that lease
  
  17. Reopen the lease
  
  18. Go to the Accounting Tab
  
  19. Enter $500,000 in the Initial Direct Costs field
  
  20. Select "Building and Land" in the FASB Lease Type dropdown
  box
  
  21. Lease Rate = 3%
  
  22. Click the CALCULATE LEASE TREATMENT button on the Accounting
  Tab
  
  23. Give the system a couple of seconds to do its thing
  
  24. Click the GENERATE ACCOUNTING SCHEDULES button in the upper
  right hand corner
  
  25. System will close that lease
  
  26. Wait for the system to finish generating the schedules
  
  27. Reopen the lease
  
  28. Click the ACTIVATE button in the upper right hand corner
  
  29. Wait for the system to finish processing the lease
  activation
  
  30. Make Note of the following
  
  â ¢ Total Rent = $14,700,000
  
  â ¢ NPV of Rent = $13,602,074.46
  
  â ¢ Current NPV of Rent = $13,602,074.46
  
  â ¢ Current Asset Value = $14,002,074.46
  
  31. Click CONTRACT REVISE button in the upper right hand corner
  of the Lease Record
  
  32. Make sure Change Type = Amendment
  
  33. Select 2019-01 as the Fiscal Period
  
  34. Click the CONTINUE button
  
  35. Make NO changes to the lease
  
  36. Click the SUBMIT FOR ACCOUNTING REVIEW button in the upper
  right hand corner
  
  37. System will close that lease
  
  38. Reopen the lease
  
  39. Go to the Accounting Tab
  
  40. Initial Direct Costs disappear, re-add $500,000
  
  41. Click the RECALCULATE ACCOUNTING SCHEDULES button in the
  upper right hand corner
  
  42. System will display a pop-up (happens every time you
  regenerate accounting schedules)
  
  43. Click the CONTINUE button
  
  44. System will close that lease
  
  45. Reopen the lease
  
  46. Click the ACTIVATE button in the upper right hand corner
  
  47. Wait for the system to finish processing the lease
  activation
  
  48. Make Note that the Current Asset Value is now $14,102,074.46
  instead of $14,002,074.46
  
  Expected fix in version:
  Reported in 3Q2019. We can not determine the target fix date for
  this issue at this time.
  
  Expected Fix Description:
  Fix will be done to measure the current asset value correctly.
  
  Key Words:
  Lease, ROU ,Asset value .
  
  Work-Around:
  None.
  

Local fix

Problem summary

• Accounting Schedule Calculations are now calculated correctly
  when Lease is amended with same fiscal period. This issue has
  been resolved in our next major release version, which is
  tentatively planned for 1H 2020.
  

Problem conclusion

Temporary fix

Comments

APAR Information

• APAR is sysrouted FROM one or more of the following:

• APAR is sysrouted TO one or more of the following:

Fix information

Applicable component levels