REFX Prepayments

[former_member8860]

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Hi

As per the equation, Right of Use Asset calculation is:

Lease Liability (which is 519,060.20)

+

Prepaid Lease Payments (which is 32,697)

Total is = 551,757.2

Now as per the attached screenshot Asset Value is fine 551,757.2 but Prepayments which is 32,697 also adds in Clearing (Liability) Tab. because of that Interest amounts also disturb.

How it can be adjusted?

Regards

[former_member441136]

Hi,

You will have to add the Frequency Term '10' in Valuation Parameter & make the frequency as Monthly.

If you don't do this, then Int. & Dep. will be posted Yearly only as per Repayment Frequency.

Ideally these should be posted Monthly.

When you add the Frequency Term '10' for Valuation, it will start showing Int. & Dep. Monthly as well as Prepaid amount in Special Flow Tab.

Regards,

Hitesh

[former_member8860]

Thanks Hitesh

As per the equation, Right of Use Asset calculation is:

Lease Liability (which is 519,060.20)

+

Prepaid Lease Payments (which is 32,697)

Total is = 551,757.2

I got the 551,757 figures. As you see in the contract there are two conditions & the result is perfectly fine. What I understand till now Clearing = Liability Now 32,697 shouldn't come in clearing tab.

as per standard equation and what configured in system (from SAP press IFRS 16 book), it should be:

RoU = 551,757.2

Liability = 519,060.20

The difference is exact 32,697

How can I achieve it? Can you please share steps?

Regards

[former_member441136]

Hi,

If the Rent paid in Advance, Contract & Condition Start Date to be put as Original Date. System will allocate the Amount between Lease Expense (before consideration period) & Lease Clearing (After consideration period).

Rent Amount after the Consideration Start Date, would be added to Right of Use for Valuation purpose. Offsetting impact would be posted as Initial Amount (Special Flow) to Liability clearing. That mean, Initial Liability will not include the whole first period amount, which is already paid in advance.

In your case, you will have to put the Original Condition start date as 01.08.2018 with actual rent amount. If amount is 56052, then 37317 would be shown in Special Flow tab as paid in Advance.

Remaining amount of 18735 will not be considered for Valuation.

Not clear about your given amount of 32697.

For getting the Special Flow values, you will have to add the Frequency '10' for Valuation parameter for Monthly, so that Int. & Dep. will be calculated monthly also. Otherwise it will be shown yearly only.

Let me know for further information.

Regards,

Hitesh