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Modification Rollback Feature - Product Advisory

LeaseAccelerator offers deal modification rollback, and the rollback of a modification is done in much the same way as the rollback of an EOT event. Users will go to the Mid-Term/EOT Events section of the Summary tile in Deal Summary to begin the process. Once complete, the events of the modification rollback will be visible in the Deal History of the original deal where the rollback was initiated, showing the details of the rollback for audit history.

Initiating the Rollback

  • Navigate to the Deal Summary, Summary tile for the modified (original) deal.

  • Right-click on the Modification Event line in the Mid-Term/End-of-Term Events section. When you select Rollback from the menu, a warning message will appear informing the user of the next step in the action. See additional sample validations messages below.

  • • Once the rollback of the modified deal is complete, the originally modified deal will be restored to its status before the rollback was done, and one of the following will happen to the rolled-back modified lease:

    • If the M00# deal is in an open period it will be deleted.

    • If the M00# deal is in a closed period it will be rolled back.

  • Modification rollbacks may be initiated on any deal in a modification chain.

    • If you have a single modification deal with an M001 suffix, the rollback is initiated from the original deal.

    • If you have multiple modifications to a deal, e.g., M001, M002, or higher, the rollback can be initiated from the original deal, the M001 deal, or on any M00# deal as necessary.

  • A00# deals are not able to be rolled back since they do not create Modification Event, they only create a new coterminous deal.

    • Coterminous deals can be unlinked and deleted or rolled back manually.

Multi-deal Cascading Rollbacks

Users will see the following types of validation messages when performing a modification rollback. The deal numbers listed in a message will depend on which deal the rollback initiates from and how many modifications exist in the chain.

Sample validation messages:

  • The original deal - ABC - has five modification

    • The original deal was modified to M001, then:

    • M001 was modified to M002, then:

    • M002 was modified to M003, then:

    • M003 was modified to M004, then:

    • M004 deal was modified to M005.

  • ABC - Modification rollback initiated here, message is: ""Rollback of this modification will either delete or rollback the following additional modified deal(s): ABC-M001, ABC-M002, ABC-M003, ABC-M004, and ABC-M005.""

  • ABC-M001 - Modification rollback initiated here, message is: "Rollback of this modification will either delete or rollback the following additional modified deal(s): ABC-M002, ABC-M003, ABC-M004, and ABC-M005.""

  • ABC-M002 - Modification rollback initiated here, message is: ""Rollback of this modification will either delete or rollback the following additional modified deal(s): ABC-M003, ABC-M004, and ABC-M005.""

  • ABC-M003 - Modification rollback initiated here, message is: ""Rollback of this modification will either delete or rollback the following additional modified deal(s): ABC-M004 and ABC-M005.""

  • ABC-M004 - Modification rollback initiated here, message is: ""Rollback of this modification will either delete or rollback the following additional modified deal(s): ABC-M005.""

  • ABC-M005 -not modified, no Modification event to rollback.

Individual Use Cases

In certain modification scenarios, a modification is performed in conjunction with a Remove/Reduce Asset Event, i.e., Return, Renewal, Buyout, or Reduce Scope. In these cases, at least two modification events will be presented in the Deal Summary of the modified deal in the Mid-Term/EOT Events section. A single modification event will be shown in this section for simple modification scenarios.

  • If a deal was modified using the Reduce Scope event as part of the modification two 'modification' events will appear. The EOT Event for the ‘reduction’ and the Modification Event.

    • The events appear separately in Deal Summary of the modified deal.

  • The reduction event recorded as part of the Modification cannot be rolled back, thus will not present a menu when the user right-clicks on it.

  • The Modification event will show the Rollback option in the menu upon right-click.

  • (Reduction in Term) appears as a comment when the modification's new end date is before the modified deal's original end date. LeaseAccelerator only records a Gain/Loss for a reduction in term for deals that have been modified such that the modification involved a reduction in the contractual term, and the deal is booked into an IFRS 16 ledger (standalone or transition). There is no Gain/Loss for Reduction in term under US GAAP. The same types of events described above will be visible in the Deal Summary of the modified deal.

  • • In scenarios where both a Reduction in Scope and a Reduction in Term appear in the Deal Summary, there will still be two events, with one showing the combined description for the reduction events.

  • If a deal was modified with a Remove/Reduce Event and only some of the assets were selected, there will potentially be three modification events in Deal Summary of the modified deal. In these scenarios, it will be necessary to rollback both the Partial Modification and the Partial EOT Events.

  • If a deal was modified without any Remove/Reduce Events recorded as part of the modification, then there will be one Modification event, and this may be rolled back.

Examples for Rollbacks:

  • During the modification, the user selected some assets on the deal for Return, in addition to reducing the term. Deal Summary of the modified deal will show the following events:

    • The Partial Modification is the Modification Event and the Partial Return is the EOT Event, both of which will be rolled back to completely rollback the deal modification. The reduction event cannot be rolled back but will be removed when the rollback of the modification is complete.

  • During the modification, the user selected all assets on the deal for Reduction in Scope. Deal Summary of the modified deal will show a 'Modification; effective DD/MM/YYYY' and a 'Modification (Reduction in Scope); effective DD/MM/YYYY'. The rollback option will only appear for the 'Modification; effective DD/MM/YYYY' upon right-click.

  • During the modification, the deal was tagged with Reduction in Term. Deal Summary of the modified deal will show a 'Modification; effective DD/MM/YYYY' and a 'Modification (Reduction in Term); effective DD/MM/YYYY'. The rollback option will only appear for the 'Modification; effective DD/MM/YYYY' on right-click.

  • During the modification, the term was extended and the IBR was changed. Deal Summary of the modified deal will show only 'Modification; effective DD/MM/YYYY'. The rollback option will appear for this event.

Example Deal History Events:

Yellow highlighted events are the new events related to the Rollback of the modification and give details on what was done to unlink and change status for the rolled back modification. The orange highlighted events indicated with a strikethrough are for the modification itself.

Special Considerations

  • When you need to import a PIW for a backdated deal that also has an original end date in the past, and you need to complete a deal modification import for the same deal, follow these steps:

    • Ensure the original deal has gone through the nightly maintenance procedure to update the lease to the correct and current status. This is especially important if the status is Evergreen.

    • You can update the status by either using the 'Auto-Record Default EOT Event' button or  Waiting overnight for the system task to update the status.

    • If you skip these steps, incorrect modification events may occur.

  • Modified M00# deals cannot be rolled back until classified and booked. However, they can be canceled before the modification is active. A Modification event appears in the Deal Summary of the original deal once the Modify Deal workflow is saved. To use this feature, navigate to the Deal Summary of the original deal and click on the kebab icon for the event in the Mid-Term/EOT Events section. Select “Cancel” and the in-process modification will be removed.

  • When deal modification linkages have been previously 'broken' using any past workarounds the rollback feature will not be able to be used, and it is recommended that Rollback Booked Deal and re-entry for any affected deals be done.
    • If a deal modification cannot be rolled back or you receive errors in the system, please contact Customer Support for assistance.

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