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JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

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Page 1: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes
Page 2: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JDE Lease Accounting 2017Statement of Direction

Page 3: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Safe Harbor Statement

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

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Page 4: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Lease Accounting - Agenda

• Overview of Lease Accounting Standard

• JD Edwards’ Statement of Direction

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Page 5: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Lease Accounting - Agenda

• Overview of New Lease Accounting Standard

• JD Edwards’ Statement of Direction

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Page 6: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Lease Accounting Standard

• What– Lessees and Lessors will recognize leases greater than 12 months on balance sheet

– Property and non-property leases

– Convergence…but with slight differences between US GAAP and IFRS

– For Lessors: Revenue recognition part of standard

• Why– Provides investors and creditors more transparency

• When– Public companies: Fiscal years starting after December 15, 2018

– Non-public companies: 2020

– Early adoption optional

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FASB ASC 842 and IASB 15 Leases

Page 7: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Lease Accounting – Scope of Lease Accounting Standard

• Revenue Recognition for lease management companies

• Lessor Accounting for property leases and non-property leases

• Lessee Accounting for property and non-property leases

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Page 8: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Customers Affected

• Most customers using Real Estate Management (REM) – lessors and lessees

–Will need enhancements to REM to manage new types of leases

• Customers with long term leases for equipment and other non-property

– Currently using AP to manage payments

–Will need a solution to manage their leases as assets on the balance sheet

– Almost all JDE customers will need a solution

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Page 9: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Lease Accounting - Agenda

• Overview of Lease Accounting Standard

• JD Edwards’ Statement of Direction

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Page 10: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JD Edwards Lease ManagementHigh Level Features

• For lessors and lessees

• For property and non-property leases

• For single and multi-asset leases

• Integrated with Fixed Assets

• Integrated with AP for automatic lease payments and balance sheet updates

• Revenue recognition for lessors

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Statement of Direction

Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

Page 11: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JD Edwards Lease ManagementBenefits

• Increase productivity with auto-generated balance sheet entries for leased assets

• Minimize time and cost of audits through a central source to manage leases and leased assets

• Reduce financial close process with integrated lease management, fixed asset, and lease payments solution

• Accurately recognize revenue through configured rules for lessors

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Statement of Direction

Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

Page 12: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JD Edwards Lease Management - Details Lessor Accounting

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Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

• Enhance Real Estate Management: modify straightline lease calculation (FASB 13) based on standard

Statement of Direction

Page 13: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JD Edwards Lease Management - DetailsLessee Accounting

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Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

• Track lease terms for property and non-property assets• Balance sheet updates for assets based on lease terms and other

lease/financial attributes

Statement of Direction

Page 14: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

JD Edwards Lease Accounting - DetailsRevenue Recognition

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Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

• Adoption of the FASB/IASB Revenue Recognition accounting standards for lease management companies

• Enhance EnterpriseOne Revenue Recognition process

– Create an additional rev rec trigger for Real Estate Management

– Provide an automated way of recognizing revenue over time based on a schedule

Statement of Direction

Page 15: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Revenue Recognition Triggers Explained

• Configurable rules to automatically manage revenue recognition– Actual revenue recognition account

– Performance liability account

• 4 different set of triggers– Invoices

– Sales Orders

– Service Billing

– Contract Billing

– Real Estate (Statement of Direction)

• Configurations based on whether or not you think performance obligations will be met at time of invoicing

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Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

Page 16: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Triggers Continued

• Company Constants– Turn the feature on or off by company

• Triggers– Company specific or use default company (00000)– Hierarchy determined by company and by system

• Accounts Receivable• Sales Order Management• Contract Billing• Service Billing• Real Estate (Statement of Direction)

– Date Setup for• Eligible for Recognition date calculation• Same period inclusion processing

– Trigger Configuration

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Roadmap subject to change without notice. The above is intended for information purposes and may not be incorporated into a contract.

Page 17: JDE Lease Accounting 2017 - Oracle · JD Edwards Lease Management - Details Lessee Accounting 13 Roadmap subject to change without notice. The above is intended for information purposes