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Auto-Record Evergreen Event Button Function - Product Advisory

July 2019

The purpose if this Product Advisory is to explain the function of the ‘Auto-Record Evergreen Event’ button seen on the Summary tile of the Deal Summary and that appears when the ‘missing implied evergreen’ message is present at the top of the screen. 

Overview

The Auto-Record Evergreen Event button in the Deal Summary workspace does not necessarily put the deal into Evergreen. Rather, it runs the nightly maintenance process for automatic Exercise of EOT Options (which we typically refer to as Evergreening, or a renewal for one payment period at a time) so that the user does not have to wait until the next day to continue working with or report on the backdated deal they presumably just loaded. 

A future LeaseAccelerator enhancement will rename this button, and the associated message, to better reflect the actual process associated with its use. The proposed label is "Auto-Record Default EOT Event" and new wording for the message is "This deal is missing an implied default EOT event, which will result in incorrect or misleading reports until nightly maintenance is run. You should Auto-Record the missing event before leaving this page."

Order of Process Handling

That automatic overnight process will do the following in relation to EOT events, in the order listed:

  • If there is an automatic Buyout or Return option whose month has been reached (e.g. Buyout @ month 38), it will be exercised. 

  • If there is an automatic Renewal option whose month has been reached (e.g. Renewal @ month 39), it will be exercised.

    • Automatic EOT events will show in the Terms section of the Schedule and Deal Summary under Mid-Term/EOT Options with the radio button selected for ‘Option will be automatically exercised if no action taken by Lessee.’  

    • Automatic Options are either set by the user when entering deal via Enter Schedule, or by leaving the ‘Min Days Notice’ field blank on a PIW. 

    • LeaseAccelerator emphasizes automatic to once again ensure that users differentiate between automatic and reasonably certain. Reasonably certain options are an accounting pretension; automatic options are contractual.

  • If a Default EOT Treatment policy has been established in the Settings workspace for the Asset Type (product category), and that policy is to ‘Terminate Without Fee’, the asset will be "Other'ed" with no associated cost.  

    • "Other'ed" is an EOT event that will appear on the Deal Summary, Summary tile and on reporting. It is typically used for assets that are temporary and have no actual life beyond the contractual term, e.g. warranties, services, software licenses. At the end of term, there is nothing to return and nothing to buyout; the asset merely ceases to exist.

  • If a Default EOT Treatment policy has been established in the Settings workspace for the Asset Type (product category), and that policy is to ‘Evergreen Renewal (month-to-month), the asset will be Renewed on a month-to-month basis. 

  • If the Asset Management workspace has been used to change the Default Disposition at EOT for an asset or group of assets, to ‘Terminate Without Fee’, the asset will be "Other'ed" with no associated cost.

  • In all other cases, the asset will be Evergreen Renewed on a month-to-month basis.

Conclusion

There are circumstances under which Auto-Record Evergreen Event will correctly terminate assets and not merely evergreen them. It is important to be aware of this functionality as it relates to the setup of your leases. If you have additional questions, please reach out to your Customer Success Manager.

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