Business / Technical Brief

Feature Demo

Short-Term and Long-Term Lease

Liability Accounting
By M Mendoza (May 2023)

Release: 23B

Copyright © 2023, Oracle and/or its affiliates

Confidential – Oracle Internal

1 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
Purpose statement
This document provides a demo for the feature included in release 23B. It is intended
solely to help you assess the business benefits of upgrading to 23B and to plan your
I.T. projects.

Disclaimer
This document in any form, software, or printed matter, contains proprietary
information that is the exclusive property of Oracle. Your access to and use of this
confidential material is subject to the terms and conditions of your Oracle software
license and service agreement, which has been executed and with which you agree to
comply. This document and information contained herein may not be disclosed,
copied, reproduced, or distributed to anyone outside Oracle without prior written
consent of Oracle. This document is not part of your license agreement, nor can it be
incorporated into any contractual agreement with Oracle or its subsidiaries or
affiliates.

This document is for informational purposes only and is intended solely to assist you
in planning for the implementation and upgrade of the product features described. It
is not a commitment to deliver any material, code, or functionality, and should not be
relied upon in making purchasing decisions. The development, release, and timing of
any features or functionality described in this document remains at the sole
discretion of Oracle. Due to the nature of the product architecture, it may not be
possible to safely include all features described in this document without risking
significant destabilization of the code.

2 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
Table of Contents

Purpose statement 2
Disclaimer 2
Test Description 4
Pre-requisite (setups) 4
Review Lease 5
Lease Detail Report LDR 7
Additional information 8
Source documents 8

3 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
 ACTION STEPS

Automatically account for short-term and long-term lease liability. The IFRS16 and
Test ASC842 accounting standards require separating the lease liability into short-term and
Description long-term for disclosure reporting. The short-term is the liability within the next 12
months, and the long-term is the liability due after 12 months. Lease administrators
can automatically generate accounting entries to classify the lease liability into short-
term and long-term and account for the periodic movements from long-term to short-
term. The liability reclassification details are available on the Schedules tab of the lease
and in the Lease Details Report.

Set up and Maintenance: Financials > Lease Accounting > Change Feature Selection
Pre-requisite
(setups)

Next

Save the change.

Note: The change above is applicable from the latest unaccrued period onwards (Ie
Current period + 1). Ie. The test env used in this test case has had accruals up to April
2023 at the time the option is enabled.

Setup Financials > Lease Accounting > Manage Lease Accounting Configuration

4 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
 Click in the BU link: Change Reclassify Liability from Null to Yes if you want to enable
the feature.

Login with functional user account.

Review Lease
New Lease created in same period when setups were enabled (created after).

Ran Accrual for current period for the Lease (ie April 2023). Accrued Expenses
shows the columns, but they have no data.

Once sysdate = May 1 2023 and General Ledger period May 2023 is open: Run
accruals for the Lease (or all Leases under the BU).

Running accrual for Lease 1016 only (current period is now May 2023):

N) Tasks > Process Leases Payments > Accruals

5 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
 N> Lease Accounting Dashboard: Output of Accrual process:

Re query the Lease, go to Schedules tab, Accrued Expenses will show IFRS16
Liability Reclassification data from May period forward:

6 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
 In order to see the updated Reclassified Short Term and Long Term Liability column
Lease Detail values in the LDR, a “no scope change” type amendment needs to performed in the
Report LDR Lease, by doing so a new LDR will be generated (Sysdate = May 1st 2023):

Screenshot of the LDR V2 for the Lease shows the columns:

Note: As with any amendments, all payments with due date prior to amendment
commencement date must be put of hold or approved (else amendment
validation will fail).

7 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal
 Additional
information N/A

N/A
Source
documents

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8 Feature Demo
Copyright © 2023, Oracle and/or its affiliates/ Confidential – Oracle Internal