Activation Group Terms & Conditions

Users must determine which terms (defined in the lease component) are likely to be exercised for each activation group. At inception, this page can only be modified when the Activation Group Status is "Define".

The list of terms is filtered by default to only show Active and Inactive terms. Use the Terms drop-down at the top of the table to select which terms to display in the table:

Active: Terms that have "Likely to Exercise" selected, where the last payment is after the Modification Date of an event (if one occurred).
Inactive: Terms that do not have "Likely to Exercise" selected, but the last payment date is after the Modification Date of an event (if one occurred).
Historical: In active activation groups, terms that are locked because the last payment date is prior to the Modification Date of an event.

Note that at least one payment term must be exercised in order to activate the activation group.

By default, selecting lease end terms (Termination Option, Purchase Option, or Casualty) as likely to be exercised at inception does not change any of the existing payments on the same day and time. If the "Lease end Term Ignores Payments" setting in Financial Organization Structure is enabled, payments that have the same Payment Start Date as the lease end term will be unselected by default. If this occurs, there is a warning on the unselected term, and you have the option of reselecting it if required.

Note: If lessee lease payments need to be split by Expense Category, the setting "Split Lease Payment" must be enabled in Financial Organization Structure. This setting is considered every time the financial schedules are generated, and the split payments can be viewed in the journals.

To exercise terms and conditions:

Open the activation group.
At the top of the activation group, navigate to the Terms & Conditions tab.
The available terms are listed in the table. The terms are read-only, but you can click on the term to view the details.
Enable the switch Likely to Exercise for terms that will be used. The total amount for exercised lease terms in a period must be a positive amount, while the total amount for exercised non-lease amounts can be negative. Note that only one Purchase Option or Termination Option term can be exercised.
If the term amount needs to be indexed in an indexation event, enable the switch Indexed. (Note that if Indexed Currency is selected, all terms are automatically set to Indexed.) This automatically selects the Apply Indexation checkbox in the term. In this case, the following fields appear in the term, pre-populated. Note that if you are transferring in an existing contract (using carry-over balances or Migration Mode) and you need to use a different base or reference rate, you can edit these fields before activating the activation group:
- Base Indexation Rate: The original indexation rate, based on the Reference Date on the Accounting tab.
  - If there is no indexation at inception, this Reference Date is equal to the ROU Start Date.
  - If there is an indexation at inception for CPI Global, the Reference Date is different than the ROU Start Date, and the Base Indexation Rate is based on this Reference Date.
- Base Indexation Date: The original indexation Reference Date on the Accounting tab at activation.
  - If there is no indexation at inception, the Reference Date is equal to the ROU Start Date.
  - If there is an indexation at inception for CPI Global, the Base Indexation Date is different than the ROU Start Date.
- Reference Indexation Rate: At inception, this is the original rate used when the activation group is activated, based on the ROU Start Date. When an indexation event is performed, this field is updated with the new indexation rate.
- Reference Indexation Date: At inception, this is equal to the ROU Start Date. When an indexation event is performed, this field is updated with the new indexation date.
To customize the columns displayed in the table, click and enable or disable the required switches.

See also: