Deal Analysis Report - Product Advisory
February 2021
Business Summary
The Deal Analysis Report has been created to provide audit calculation support for your lease accounting. This report includes automated tie-out and traceability for individual schedule lease assets, liabilities and expenses, including depreciation.
In this report, you will find reperformance of key accounting calculations such as asset and liability takedown, asset takedown adjustments, and straight-line expense calculations. All calculations run in active spreadsheets with formulas revealed to show the calculations.
Updates to the Deal Analysis Report (DAR) in 21R1 include the following:
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The Amortization Schedule (Fiscal) tab has been added
This new tab captures the ST/LT liability and shows the alignment of payments to the fiscal calendar.
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The Analysis tab is no longer empty for deals where Available For Use Date (AFUD) is present
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For deals where assets are available on a different date than the lease start date, the Analysis tab is now properly populated.
Note: Caveats will be presented for DARs run at lease inception where there is an asset that is not available until after the lease start date (since the DAR does not currently support Prepayment calculations) or when there are multiple AFUDs in play.
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Where the asset and liability are capped at Original Equipment Cost (OEC) under ASC 840 or IAS 17, IBR is now reported based on the imputed IBR
On the Deal Analysis Report and certain reports, the IBR reported for such scenarios will now be the imputed IBR used to back into the OEC, not the IBR specified by the user at booking. This corrects calculations and supports reconciliation of Capital leases under the older standards.
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Mismatched Lease Incentives and AROs were causing asset and expense reperformance to fail
Leases where a related expense has been configured for a lease incentive and/or ARO, qualified to an asset type that is not present on the lease schedule are now properly reported.
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Missing closeout entries from backdated modifications were causing reperformance calculations to fail
DARs run for the Right-Hand Side (RHS) deal of a modification from lease inception, where the modification was entered as an event backdated into a closed period is now properly reported.
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Corrected expense reperformance for remeasurement of Capitalized-Operating deals
DARs run for a remeasurement where the remeasurement results in a balance being established in the Step Payment Timing Adjustment (SPTA) account.
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Added a caveat for straight-line expense reperformance when there is an impairment
Capitalized-Operating deals that include an impaired asset (partial or full impairment) are no longer straight-lined, as the depreciation post-impairment shifts to straight-line.
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Improved display of caveat for split classification
Deals with split classification which were not previously displaying the caveat but should have and deals with multiple assets plus a characteristic that incorrectly triggered display of the caveat when it was not applicable.
Lien: There are still a couple of obscure scenarios under which the split classification caveat is improperly displayed/omitted.
Generating the Report
To locate this report, select Reporting from the left Nav Bar. Then click on the Accounting tile.
The list of Accounting Reports is listed alphabetically in the menu on the right.
The Deal Analysis Report is accessible to users with Ledger Export Report access by default.
This report can currently only be generated in transactional currency.
Parameters
The report has dynamic parameters, based upon the selected ‘Schedule Number’. If the Schedule Number is not booked to the selected ‘Set of Books’, you will see the following validation error:
The Inflection (Takedown) Event parameter is also dynamic, based on the selected Schedule Number and Set of Books:
Report Parameter Definitions
Parameter |
Description |
|---|---|
Schedule Number |
Available filtering on a single schedule. |
Set of Books |
Filters customer ledgers via drop-down menu. This is a REQUIRED FIELD. |
Inflection (Takedown) Event |
Drop-down list of the Inflection (Takedown) Event associated with the selected Set of Books (ledger) and Schedule. This is a REQUIRED FIELD. Example of parameter choices for Inflection Takedown Event: Lease Inception, Transition, Modification, etc. |
Once the parameters have been selected, click on the Export button for the report to begin generating. Click OK to proceed. When the report is complete, you will receive the following options:
Report Output
This report is comprised of six tabs:
Ledger Entries – Base data file for the Deal Analysis Report
Overview
Amortization Schedule (Payment)
Related Expenses
Analysis
Parameters – Provides a snapshot of the selected parameters used for report generation
Ledger Entries
The Ledger Entries section is the standard Ledger Export with some new columns as described in the table below. This section will not exactly match the output of the standard Ledger Export; entries in the ‘Triggering Event’ column, with a description of ‘Write-off’ will be the difference.
Ledger Entries Tab New Column Descriptions
Column Header |
Description |
|---|---|
Net |
Difference between the Debit (DR) and Credit (CR) columns. |
Entry Type |
Assignment of the reason, or cause, for which each line item was created. |
Affected Component |
Assignment of the lease attribute for which each line item was created. |
Triggering Event |
Secondary assignment of type of event for which each entry was created. Entries with ‘Write-off’ populated in this column, will not be present on the standard Ledger Export for the schedule. |
Event Details |
Details associated with the Triggering Event. |
JE Type |
Description for each entry based on the following labels: Normal, Catch-up entry for backdated entry, Correcting entry for closed journal entries, and Entry improperly backdated from subsequent period. |
Screenshot of sample Ledger Entries tab:
Overview
The Overview section of the report provides an overview of the lease in general and is similar to the Deal Summary in the application, with the output specific to the ledger and inflection (takedown) event selected in the parameters.
Overview Tab Descriptions
Column Header |
Description |
|---|---|
Lease #: |
The schedule number selected in the parameters of the report. |
Lessee: |
The legal party to the agreement leasing the equipment or renting the real estate. |
Lease Start Date: |
The commencement date or takedown date of the lease. The field to the right of this field will provide information on when the lease was booked. (e.g. Booked on 14-Apr-2020) |
Currency: |
The currency of the deal; currently only transactional currency is available. |
Payable in: |
Payment mode: Advance or Arrears |
Contractual Term in Months: |
The number of months in the contractual term of the selected schedule. |
Reasonably Certain Holding Period (RCHP): |
The Reasonably Certain Holding Period of the selected schedule in months. |
Reasonably Certain Disposition: |
The Reasonably Certain EOT Option of the selected schedule. |
# of Assets: |
The number of assets associated with the selected schedule. |
Original Equipment Cost: |
Original Equipment Cost as recorded in the application. |
Analysis for Takedowns at: |
Date of Inflection (Takedown). The field to the right of the date indicates the type of inflection. (e.g. Transition) |
Ledger: |
Set of Books selected in the parameters of the report. |
Accounting Standard: |
The associated accounting standard for the selected ledger. |
Respect AFUD/RCHP? |
Policy election to respect AFUD (Available For Use Date) and RCHP. Values are ‘Yes’ or ‘No’. |
Remaining Term in Months: |
Remaining schedule term (may be contract or RCHP, depending upon policy election) in months. |
Total Original Equipment Cost: |
Original Equipment Cost as recorded in the application. |
IBR: |
IBR rate for the selected schedule and inflection (takedown). The field to the right of the IBR rate indicates when the IBR rate was configured in the application. |
Screenshot of sample Overview tab:
Amortization Schedule (Payment)
The Amortization Schedule (Payment) section of the report includes calculated amortization fields, with formulas available in each field, with the exception of the two following columns, which are populated from the application database:
New Liability: Base lease
Total Payment
If the fields are not applicable for the selected schedule and inflection (takedown) event, then the fields will be blank.
Amortization Schedule (Payment) Tab Descriptions
Column Header |
Description |
|---|---|
Payment Period Ending |
Date payment period ends. |
Period # |
Payment period number associated with the Payment Period End Date. |
Column Header |
Description |
|---|---|
Opening Liability Balance |
Opening lease liability, if applicable, for the selected schedule and inflection (takedown) event. |
New Liability: Base lease |
New lease liability, if applicable, for the selected schedule and inflection (takedown) event. This field is populated from the application database. |
New Liability: ARO |
New ARO liability, if applicable, for the selected schedule and inflection (takedown) event. |
Remeasurement |
Remeasurement of lease liability, if applicable, for the selected schedule and inflection (takedown) event. |
Opening Accrued Interest Balance |
Opening Accrued Interest Balance, if applicable, for the selected schedule and inflection (takedown) event. |
Adjustment |
Adjustment to Opening Accrued Interest Balance, if applicable, for the selected schedule and inflection (takedown) event. |
Accretion (Payable in Arrears) |
Interest accretion (payable in arrears), if applicable, for the selected schedule and inflection (takedown) event. |
Total Payment |
Total payment amount, populated from the application database. |
Interest Paid |
Interest paid for the selected schedule and inflection (takedown) event. |
Principal Reduction |
Principal reduction for the selected schedule and inflection (takedown) event. |
ARO Paid |
ARO paid for the selected schedule and inflection (takedown) event. |
Accretion (Payable in Advance) |
Interest accretion (payable in advance), if applicable, for the selected schedule and inflection (takedown) event. |
Closing Accrued Interest Balance |
Closing Accrued Interest Balance, if applicable, for the selected schedule and inflection (takedown) event. |
Writeoff from Terminations or Modification |
Write off amounts from terminations or modifications, if applicable, for the selected schedule and inflection (takedown) event. |
Closing Liability Balance (Based on Payment Periods) |
Closing liability balance, based on payment periods, for the selected schedule and inflection (takedown) event. |
PV of Payment |
Present Value of the Payment stream for the selected schedule and inflection(takedown) event. |
Accounting Treatment |
Lease classification based on the selected schedule, ledger and inflection (takedown) event. |
Screenshot of sample Amortization Schedule (Payments) tab:
Amortization Schedule (Fiscal)
The Amortization Schedule (Fiscal) section of the report includes calculated amortization fields, with formulas available in each field, with the exception of the two following columns, which are populated from the application database:
New Liability: Base lease
Total Payment
If the fields are not applicable for the selected schedule and inflection (takedown) event, then the fields will be blank.
Amortization Schedule (Fiscal) Tab Descriptions
Column Header |
Description |
|---|---|
Fiscal Period Ending |
Date fiscal period ends. |
Column Header |
Description |
|---|---|
Period # |
Payment period number associated with the Payment Period End Date. |
Opening Liability Balance |
Opening lease liability, if applicable, for the selected schedule and inflection (takedown) event. |
New Liability: Base lease |
New lease liability, if applicable, for the selected schedule and inflection (takedown) event. This field is populated from the application database. |
New Liability: ARO |
New ARO liability, if applicable, for the selected schedule and inflection (takedown) event. |
Remeasurement |
Remeasurement of lease liability, if applicable, for the selected schedule and inflection (takedown) event. |
Adjustment |
Adjustment to Opening Accrued Interest Balance, if applicable, for the selected schedule and inflection (takedown) event. |
Accretion |
Interest accretion (payable in arrears), if applicable, for the selected schedule and inflection (takedown) event. |
Total Payment |
Total payment amount, populated from the application database. |
Interest Paid |
Interest paid for the selected schedule and inflection (takedown) event. |
Principal Reduction |
Principal reduction for the selected schedule and inflection (takedown) event. |
ARO Paid |
ARO paid for the selected schedule and inflection (takedown) event. |
Writeoff from Terminations or Modification |
Write off amounts from terminations or modifications, if applicable, for the selected schedule and inflection (takedown) event. |
Closing Liability Balance (Based on Fiscal Periods) |
Closing liability balance, based on fiscal periods, for the selected schedule and inflection (takedown) event. |
Short Term Liability |
Portion of the total Liability due within one fiscal year. |
Long Term Liability |
Portion of the total Liability due more than one fiscal year in the future. |
Accounting Treatment |
Lease classification based on the selected schedule, ledger and inflection (takedown) event. |
Screenshot of sample Amortization Schedule (Fiscal) tab:
Related Expenses
The Related Expenses tab captures Lease Incentives and ARO. Payment dates, amounts and any necessary PV calculations related to Lease Incentives and ARO are included in this tab. If there are no entered Lease Incentives and/or ARO for the selected schedule, this tab will render ‘No Lease Incentives or AROs’.
Related Expenses Tab Descriptions
Column Header |
Description |
|---|---|
Payment Date |
The payment date of the Lease Incentive or ARO. |
Fractional Period |
Display of the Fractional Monthly Period, if applicable. Example: Based on period from 01-Dec-2018 to 01-Jan-2019 |
Attributable to assets |
Asset associated with the Lease Incentive or ARO. Example: Building with Balance Established on 01-Jan-2019. |
Nominal Amount |
The transaction amount of the Lease Incentive or ARO. |
Column Header |
Description |
|---|---|
Present Value |
The Present Value of Nominal Amount, if applicable. |
Included in Lease Asset |
Indicates if the Present Value is included in the Lease Asset. Values will be ‘Yes’ or ‘No’. |
Screenshot of sample Related Expenses tab:
Analysis
The Analysis section brings all of the information from the other tables together, in a formula-driven summary. The formulas are visible in each cell, to provide support for the calculations.
Analysis Tab Descriptions
Line Item/Section |
Description |
|---|---|
Title |
A short description of the deal and inflection event selected for this report. Example: Asset-Level Analysis: Building with Balance Established on 01-Jan-2019. |
# of Assets |
The number of assets associated with the selected schedule. |
Original Equipment Cost |
Original Equipment Cost as recorded in the application. |
Fractional Monthly Period |
Display of the Fractional Monthly Period, if applicable. |
Liability Calculation Section |
PV of Payment Stream and Existing Accrued Interest Balance, with comparison to System-Generated Liability. |
Straight-Line Expense Calculation Section |
Applicable for CapOp deals. Total Payments plus adjustments to expense over the lease term and fiscal periods. |
Line Item/Section |
Description |
|---|---|
Asset Calculation Section |
Base Liability Calculation plus any adjustments to determine the Asset value. |
Depreciation Calculation Section |
Applicable for Finance deals. Depreciation calculation based on Net Book Value and depreciable term. |
Screenshot of sample Analysis tab:
Parameters
The Parameters section includes the parameters selected to generate the report. See the Report Parameters section above.
21R1 Caveats
The following are known scenarios that are not supported by the Deal Analysis Report in 21R1:
Because the ARO is accounted for as a separate asset, the ARO accretion is not subject to straight-line expense treatment. As such, the Calculated SLE and the System-Generated SLE may not match exactly.
This report does not currently support straight-line expense reconciliation for Capitalized-Operating leases that include accretion of a Guaranteed Residual Liability.
The amortization period is not long enough to ensure that the second period includes a full month of expense. The System-Generated SLE may be understated and will not match the Calculated SLE if it represents a prorated period.
Because ARO accretes in arrears but the deal is payable in advance, the Amortization Schedule tabs are not reflecting the true liability, nor the proper accretion schedule, which should be split between advance and arrears. As such, the calculated amounts on the Analysis tab may be incorrect.
Because one or more of the assets is impaired, depreciation is straight-lined, and the lease is no longer subject to straight-line expense treatment. As such, the Calculated SLE and the System-Generated SLE may not match exactly.
This report does not currently support analysis of deals containing assets with an Available For Use Date (AFUD) after lease start date.
This deal contains assets with a Depreciation Start Date after the lease start date, so the depreciation expense as calculated in this report will not match the system-generated depreciation.
This report does not currently support analysis of deals containing assets with differing Available For Use Dates (AFUDs).
This report does not currently support analysis of deals containing assets with differing depreciation terms.
Please note that this lease contains multiple assets with different accounting treatment. Because the amortization schedule is presented at the schedule-level, this report cannot currently provide a useful reconciliation of calculations to the system, which is asset-level.