Receivables - EBS (MOSC)

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Lease Free Period Accounting

edited Jul 7, 2016 5:01AM in Receivables - EBS (MOSC) 1 commentAnswered

 

We are using Oracle r12 AR Module and have a requirement to account for rent free period in which revenue will be recognized from the beginning of lease period, however, billing / receivables will be recognize after free period.

 

  Business Scenario: (example)

 

========================

   

Lease contract period: Jan-2016 to Dec-2016

 

Rent Free Period:  First two months (Jan-2016 to Feb-2016)

 

 

Total Lease Amount: 12000

 

 

Rent Free amount: 2,000 (first two period)

 

 

Average rent per month: 833  (10,000 / 12)

 

 

 

We need to record Rent Free invoice for 2 months (affecting only revenue; no affect on customer statement) & subsequent installment invoices affecting receivables)

 

 

    • Please note the following accounting entries that needs to be generated:

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