Lease End Terms

Multiple lease end terms can be added, but only one option can be selected for each activation group. The lease end types are:

  • Purchase Option: Indicates that the lessee can purchase the leased asset at a specific price at the end of the term or during a specific period of time. If the Purchase option is entered in the middle of the contract, users can specify whether the term is simply a Purchase Option payment or an Early Buyout term.
  • Termination Option: Indicates that the lease contract must end early, before the end of the terms.

To add a lease end term:

  1. Load the lease component, and click Terms & Conditions in the left-panel.
  2. Click Add New TermLease End.
  3. In the Term Type field, select "Purchase Option" or "Termination Option".
  4. By default, the selected Term Type populates the Name field. Modify it if required.
  5. In the field Lease Amount/Unit, enter the amount that will be impacted by the lease end event, according to the Amount Frequency. Note that for a Termination Option, you can enter a value of 0 in this field.

    Note: If the contract is a non-lease service contract (set in the Lease Type field), lease amounts cannot be entered.

  6. In the field Non-Lease Amount/Unit, enter the amount for the lease end term, according to the Amount Frequency. You can distribute the non-lease amount for different GL categories once the term has been submitted.

    Note: If the contract is a short term lease or low value lease (set in the Lease Type field), non-lease amounts cannot be entered.

  7. The Total Amount field displays the non-lease amount entered.
  8. The Contract Currency field shows the value that was selected for the MLA or contract.
  9. In the Amount Frequency field, indicate how frequently the total amount is applied (e.g., daily, monthly, yearly). This field is automatically set to "One Time".
  10. The Payment Frequency field indicates how frequently payments will be made. This field is automatically set to "One Time".
  11. The field First Payment Date is automatically set to the day of the last payment of the base rent. Modify the field as required, but it must be set to the same day of the month that was selected in the base rent term, and must fall within the period defined by the Base Rent and Extension term, plus 1 month.
  12. The field Last Payment Date is automatically set to be the same as the day of the last payment.
  13. The GRV/Unit field cannot be set for a lease end term.
  14. For Purchase Option terms, the Early Buyout checkbox can be selected to have the lease terminated with the purchase option.
  15. The field Term (months) is automatically set to "0".
  16. The Expected T&C Start Date and Expected T&C End Date are automatically set to the First Payment Date.
    • If Early Buyout is selected, the Expected T&C End Date is automatically set to:
      • The day before the Purchase Option Payment Date for payments in advance.
      • The Purchase Option Payment Date for payments in arrears.
  17. By default, the field Lessor Notification Date is set to be 90 days before the Expected T&C End Date of the term. If the term spans less than 90 days, the notification date is set to the start date of the term. This field can also be changed at the activation group level.
  18. If a Non-Lease Amount was entered, the non-lease amount distribution to one or more GL categories must be defined in the "Manage Non-Lease Amount Distribution" section that appears automatically at the end of the form.
    1. Select whether the distribution will be done by amount or percentage in the Portion drop-down.
    2. The GL categories (defined in the Nakisa AdminConsole) are listed under Non-Lease Amount Distribution. Click on the required category row, and enter the Non-Lease Portion.
  19. Click Submit.

See also:  

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