The new FASB ASC Accounting Standards Update 842 has raised a few concerns and created a little confusion on exactly how to best implement it and remain in compliance. To meet the new requirements, Oracle PeopleSoft delivered the Lease Administration Phase 4 updates in PeopleSoft 9.2 Image 27 for the shared functionality between Asset Management (AM) and Lease Administration (LA). If you’ve already deployed the Lease functionality in PeopleSoft AM, then you’ll need to review and update your current AM Leases and configuration to take advantage of the new functionality. The newly released functionality gives AM-only customers some of the core LA features, so upgrading to 9.2 Image 27 may be all you need to meet your organization needs. Common Components such as LA Accounting Rules, Lease Types, Amendment Types, and Transaction Routing Codes are accessible to AM-only customers. If you aren’t current with your PUM images, view the PUM as-a-Service, Fixed Fee, Tell Me More post by Richard George. Note, Oracle PeopleSoft created an Activity Guide, Transitioning to New Lease Accounting Standards, to step you through the transition process for existing leases (remember to first log into your Oracle PeopleSoft account).
One limitation of AM Leases is that it is limited to one asset per Lease. If your Leases have multiple Assets per lease, then you’ll need to look at the expanded functionality provided in the LA (formerly Real Estate Management) application. Phase 3 updates to Lease Management were delivered in PeopleSoft 9.2 Image 24. LA allows for multiple assets per lease, as well as having additional functionally for adding Clauses, Options, Amendments, Operating Expenses, and tracking Critical Dates. With LA, you can also record and track Receivables leases and integrate with AR/BI for invoicing customers. The LA functionality is comprehensive and designed to support organizations with many and complex leases.
One of the powerful features of the LA module is its integration with other PeopleSoft modules. This improves efficiency for tracking and recording of Lease data for internal reporting and compliance reporting. LA interfaces with Payables to automate payments to your lease vendors via the “Transaction Generator.” This sends transaction data to Payables, reduces the manual effort for recording and making Lease payments, and eliminates a source for errors. LA also creates and posts monthly accounting entries for the General Ledger using the Journal Generator like other PeopleSoft modules.
Overall, the new functionality reduces time to manage leases, decreases a source of error, and increases internal/external reporting. Thank you, PeopleSoft, for your continued investment in a great system.
Additional information is found in these Oracle PeopleSoft YouTube videos:
- PeopleSoft Talk with Marc Weintraub: Lease Administration featuring Loida Chez
- PeopleSoft Lease Accounting
- Image Highlights, PeopleSoft FSCM Update Image 24
- Image Highlights, PeopleSoft FSCM Update Image 27
Talk with your Sierra-Cedar Account Manager to discuss how Sierra-Cedar can help with your Lease transition.