How to handle grace periods with interest accrual in Asset Leases module
Hi team! How are you?
We are implementing an operating lease in Oracle Assets – Manage Leases.
The lease has the following characteristics:
- Lease term: 62 months
- Interest rate: 4.94157895
- Currency: PEN
- Payment frequency: Monthly, in arrears
- First 2 months are grace periods (payment amount = 0), but interest must still be accrued during those months and capitalized into the lease liability.
- From month 3 onwards, regular monthly payments occur.
In the current Assets Leases setup, when we define the payment schedule with $0 for months 1 and 2, the system does not calculate interest for those periods, because it appears to tie interest calculation directly to the payment amount defined in the recurring/one-time payments. This causes the amortization schedule to not match IFRS/ASC 842 requirements, where interest must accrue regardless of actual cash payment.