IBM TRIRIGA Version 10 Release 3. Lease and Owned Property Contract Management User Guide

Transcription

1 IBM TRIRIGA Version 10 Release 3 Lease and Owned Property Contract Management User Guide

2 Note Before using this information and the product it supports, read the information in Notices on page 241. This edition applies to ersion 10, release 3, modification 0 of IBM TRIRIGA and to all subsequent releases and modifications until otherwise indicated in new editions. Copyright IBM Corporation 2011, US Goernment Users Restricted Rights Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM Corp.

3 Contents Chapter 1. Managing leased and owned property contracts Chapter 2. Oeriew of contract management Contract process flows Contract roles Application administrator Real estate abstractor Real estate contract manager Lease accounting manager Asset manager Chapter 3. Setting up contracts Setting up fields and records Classifications Lists Locations Contacts Setting up templates Creating templates Editing templates Deleting templates Setting up lease defaults Setting up lease abstract defaults Setting up lease accounting defaults Setting up OSCRE tools Oeriew of OSCRE process Setting up the properties file Setting up administrator processes Setting up application settings Chapter 4. Creating lease abstracts.. 17 Lease abstract records Creating lease abstract records Creating lease abstract records by sending offline forms Creating lease abstract records by sending OSCRE.xml files Exporting lease abstract records by sending OSCRE.xml files Form tabs Importing lease abstract records by sending OSCRE.xml files Form tabs Form tabs General tab Abstract details section Document details section General section Primary address section Lease contacts section Units section Details section Parent real estate contract of sublease section 26 Critical dates section Premise location section Location summary section Location cost code section Tenant section Landlord section Management company section Guarantor section Default remit to section Abstract notifications section Additional notice addresses section Real estate lease section Other dates section Lease abstract exceptions section Rent tab Lease details section Rent clause section Rent schedules section Historic payment schedules section Fair market rate alue section Index adjustments section Percentage rent clause section Percent rent setup section Sales reporting details section Sales exclusions section Tax exclusions section Allowable deductions section Percent rent schedules section Commissions section Commission schedules section Commissions clauses section Default tab Default clause section Default clauses section Security deposit tab Clause details section Cash cost code section Expense cost code section Security deposit clauses section Options tab Instructions section Tenant renewal options section Other options section Rights tab Alterations section Alterations clauses section Assignment and subletting section Holdoer section Other rights section Other rights details section Signage section Restoration obligations section Allowances tab Clause details section Allowance clauses section Copyright IBM Corp. 2011, 2012 iii

4 OPEX/CAM tab Clause details section CAM audit setup section Serices included section Serices excluded section CAM schedules section CAM clauses section Insurance tab Clause details section Insurance schedules section Insurance clauses section Tax tab Tax clause section Tax schedules section Tax clauses section Parking tab Clause details section Space types section Co-tenancy tab Clause details section Co-tenancy item section Co-tenancy items section Green lease proisions tab Green lease proisions clause section Green lease proision clauses section Credentials section Responsibilities tab Clause details section Responsibility serice section Responsibility serices section Other clauses tab Other clause section Other clauses section Accounting tab Accounting details section Borrow rate and % growth assumptions section Rent component assumptions section Likely term section Options section Likely term option section FASB 13 treatment section Chapter 5. Creating leases Oeriew of lease creation Real estate lease records Asset lease records Accounting tab concepts Likely terms Likely options Assumptions Amortization Fiscal line items Straight line calculations Lease abstract to real estate lease process.. 84 Creating real estate lease records Form tabs General tab Clauses, options, and terms tab Accounting tab Creating asset lease records Form tabs General tab Assets tab Clauses, options, and terms tab Accounting tab Chapter 6. Creating owned property agreements Owned property agreement records Creating owned property agreement records Form tabs General tab General section Units section Details section Accounting section Critical dates section Primary location section Primary address section Primary location graphic section Contract notifications section Chapter 7. Maintaining contracts Oeriew of contract maintenance Contract maintenance Contract notifications Requesting real estate data changes Form tabs General tab Requesting asset lease contract changes Form tabs General tab Requesting lease assumption changes Form tabs General tab Chapter 8. Managing payments Managing inoices Creating real estate inoices Form tabs Creating asset inoices Form tabs Managing payables Processing payments Form tabs Releasing payments Form tabs Voiding payments Form tabs Stopping payments Form tabs Reconciling operating expenses Form tabs Calculating index adjustments Form tabs Calculating percentage rent reports Form tabs Managing receiables Processing lease inoices Form tabs i Copyright IBM Corp. 2011, 2012

5 Processing lease receipts Form tabs Chapter 9. Viewing reports Home portal Viewing my reports portal Viewing the reports tab Chapter 10. Reiewing lease assumptions Oeriew of assumptions reiew process Indiidual lease process Bulk create process Reiewing an indiidual real estate lease record 175 Assumption audit log record General tab Reiewing multiple real estate lease records Bulk create reiew record General tab Reiewing an indiidual asset lease record Reiewing multiple asset lease records Chapter 11. Common elements of leased and owned property contracts. 185 Payment schedule record General tab Document reference section General section Details section Cash cost code section Expense cost code section Accrual cost code section Processing section Payment schedule section Partial first payment section Partial last payment section Tax breakdown section Payment instruction section Clauses section Payment line items section Generate payment schedules wizard General tab Document reference section General information section Payment parameters section Payment schedule section Processing rules section Cash cost code section Expense cost code section Accrual cost code section Tax breakdown section Payment instruction section Payment instruction record General tab General section Details section Remit to section Paid by section Option wizard General tab Document reference section Details section Purchase details section Comments section Exercise date notifications section Likely term details section Notify roles section Exercise details section Other details section Termination details section Payment schedule section General section Contract notification record General tab General section Details section Contract section Transactions created section Lease clause record General tab Document reference section Lease clause details section Coenant details section Clause text section Audit details section Serices included section Serices excluded section Index adjustments section Improement clause details section Co-tenancy details section Co-tenancy items section Commission details section Default section Fair market rate alue section Green lease proisions section Insurance clause details section Parking details section Parking spaces section Percentage rent setup section Sales reporting details section Sales exclusions section Tax exclusions section Allowable deductions section Reporting section Lease responsibilities section Alterations section Deposit details section Cash cost code section Expense cost code section Tax details section Payment schedule section Options section Comments section General section Units section Asset lease clause record General tab Document reference section Asset lease clause details section Coenant details section Clause text section Contents

6 Audit details section Index adjustments section Commission details section Default section Green lease proisions section Insurance clause details section Lease responsibilities section Holdoer section Deposit details section Expense cost code section Tax details section Payment schedule section Options section Comments section General section Units section Lease terms record General tab General section Units section Lease information section Rent details section Rent escalations section Standard operating expenses per area per year section Other recurring expenses section Expense inflation rates section Expense details section Buildout section Relocation section Dilapidation and restoration section Fiscal year section Discount and tax rates section Depreciation schedules - tax basis section Depreciation schedules - GAAP basis section 234 Financial analysis tab Summary metrics tab Summary metrics section Profit and loss impact section FASB 143 section Cash flow NPV breakdown section Three year cash flow summary section Common elements of lease abstract clauses Document references Clause details Fair market rate alue section Index adjustments section Setting default alues for the index adjustments section Populating default alues for the index adjustments section Generate payment schedules wizard Notices Trademarks i Copyright IBM Corp. 2011, 2012

7 Chapter 1. Managing leased and owned property contracts You use the IBM TRIRIGA Real Estate Manager application to manage real estate contracts and asset lease contracts. You can store contract documentation, conditions, clauses, options, and financial transactions in one central repository. The application contains automated notifications and alerts about upcoming lease expirations and other critical dates. The application also shows required actions and contract options to aoid oerpayment and late fees. You also use the application tools to create financial reports, maintain payment processes, and satisfy regulatory requirements in lease accounting and allocations. Copyright IBM Corp. 2011,

8 2 Copyright IBM Corp. 2011, 2012

9 Chapter 2. Oeriew of contract management Contract process flows To manage your real estate contracts or asset lease contracts with the IBM TRIRIGA Real Estate Manager application, you must understand the process flows of your company practices. You must also understand the application portals that are aailable to your company role. The first phase in the real estate contract or asset lease contract management process is identifying and acquiring the property. The next phase is documenting the clauses, options, and terms for the lease or purchase transaction by entering them into the application. The contract process also includes maintaining contracts by sending and receiing notifications about upcoming dates, and reising each contract through proposed changes and amendments. The final phase includes managing the scheduled payments, one-time payments, pass-through payments, payment adjustments, accounts payable, and accounts receiable. Contract process flow Figure 1. Flow diagram for the different phases of the contract management process Real estate contract process The contract creation, contract maintenance, and payment management phases are explained in this sequence. Howeer, the process flow in your organization might follow a different sequence that is based on your company practices. In the application, real estate contract creation includes: Creating lease abstracts Creating real estate leases Creating owned property agreements Maintaining contracts Managing payments For more information, see the Real Estate Portfolio Planning chapter in the IBM TRIRIGA 10 Real Estate Transaction Management User Guide book. Asset lease contract process The contract creation, contract maintenance, and payment management phases are explained in this sequence. Howeer, the process flow in your organization might Copyright IBM Corp. 2011,

10 follow a different sequence that is based on your company practices. In the application, asset lease contract creation includes: Creating asset leases Maintaining contracts Managing payments Process flow configuration The process flows deliered with the IBM TRIRIGA application can be modified with the IBM TRIRIGA Application Platform building tools, as required by your company standards and policies. Contract roles When you sign into the application, you are taken to your home page. Your home page is your entrance into the application. From your home page, you can reiew your home portal or use the menu system to open the process portals aailable to your role. Use your menu bar to open other aailable portals. Based on your role, your application might consist of one or many portals. The setting of the IBM TRIRIGA home page is set in the Default Portal section of your profile record. Your home portal or process portals might ary, based on your role in the company and your security and license access. Howeer, your portals contain a combination of the components and section types described in this discussion. In turn, each portal consists of portal sections. Each portal section seres a specific function and shows the information that applies to your business role. The portal sections in your portal are configured by your application administrator for your role in the system. For more information, see the Portal Sections subchapter in the IBM TRIRIGA 10 Getting Started User Guide book. Application administrator The application administrator is the user role that typically sets up and configures the application. The primary responsibility of the application administrator is to manage the IBM TRIRIGA application for the company. This responsibility includes creating and managing licenses and security groups, setting up user access, and maintaining system-leel and application-leel standards such as classification and list alues. When you sign in as an Application Administrator role, the home portal is the Application Administrator portal. An example of the Application Administrator portal includes the following portal sections: Reminders Application Administrator Last Visited Application Administration License and Security Application Administration - Utilities 4 Copyright IBM Corp. 2011, 2012

11 Real estate abstractor The real estate abstractor or abstractor manager is the user role that typically summarizes the real estate (RE) contract details for data entry into the application. The primary responsibility of the real estate abstractor is to summarize or abstract real estate leases for the company. Other responsibilities include interpreting the lease language, and translating that information into the application. The lease abstracting task might also be conducted by an external abstractor-role resource. When you sign in as a Real Estate Abstractor role, your home portal is the Real Estate Abstractor portal. An example of the Real Estate Abstractor portal includes the following portal sections: Related Links RE Abstractor Work in Progress Lease Abstracts Real estate contract manager The real estate contract manager or contract administrator is the user role that typically monitors the contract details and actiities for real estate (RE) properties. The primary responsibility of the real estate contract manager is to manage real estate leases and owned property agreements for the company. This responsibility includes erifying that payments are made, options are exercised, and renewals are ealuated. Other responsibilities include interpreting the lease language, checking building data, abstracting leases, and translating that information into the application. The lease abstracting task might also be conducted by an external abstractor-role resource. When you sign in as a Real Estate Contract Manager role, your home portal is the Real Estate Contract Manager portal. An example of the Real Estate Contract Manager portal includes the following portal sections: Reminders RE Contract Manager Performance Metrics RE Contract Manager Related Links RE Contract Manager Last Visited Lease Obligations Lease Expirations Utilization Rate / RE Contract Area Per Person (Space Use Agreement) Lease accounting manager The lease accounting manager or lease accountant is the user role that typically manages the accounting details and actiities for real estate (RE) and asset leases. The primary responsibility of the lease accounting manager is to manage the Financial Accounting Standards Board (FASB) data and International Accounting Standards Board (IASB) data. This responsibility includes erifying that assumptions are reiewed, options are planned, and renewals are ealuated. When you sign in as a Lease Accounting Manager or Lease Accountant role, your home portal is the Lease Accounting Manager portal. An example of the Lease Accounting Manager portal includes the following portal sections: Reminders Lease Accounting Manager Chapter 2. Oeriew of contract management 5

12 Related Links Lease Accounting Manager Last Visited Oerdue Lease Assumptions My Lease Reiews Amortization Schedule Summary 10K Financial Report Asset manager The asset manager is the user role that typically manages a defined class of assets such as computer equipment, office equipment, point-of-sale equipment, and furniture. The primary responsibility of the asset manager is to identify and procure products within the budgetary constraints and quality standards established by the company. This responsibility includes managing the total cost of asset ownership and depreciation, managing asset lease agreements and warranties, and ensuring that purchased assets are appropriately maintained. When you sign in as an Asset Manager role, your home portal is the Asset Manager portal. An example of the Asset Manager portal includes the following portal sections: Reminders Asset Manager Related Links Asset Manager Asset Value by Specification Class Last Visited Quick Find (Inentory) Quick Find (Installed/Assigned Assets by Type) My Purchase Orders 6 Copyright IBM Corp. 2011, 2012

13 Chapter 3. Setting up contracts Setting up fields and records Before the contract process begins, certain actiities are necessary to prepare the application for your real estate contracts, asset lease contracts, or both. These setup actiities focus on tailoring templates, classifications, lists, locations, and contacts for your organization. These actiities also include establishing lease abstract defaults and configuring for the Open Standards Consortium for Real Estate (OSCRE) interface. To prepare the application for your real estate or asset lease contracts, you need to set up the classifications, lists, locations, and contacts for your organization. Classifications Classifications are records presented in a hierarchical fashion. If the field type is a classification, a record in the classification hierarchy can be chosen as the field alue. Real estate and asset lease contracts hae seeral classification fields that help to describe each record. For example, a real estate lease includes the following classifications: Area type Clause section category Clause type Contract status Contract type Cost index Granted in lease Late fee type Lease class Lease type Maintenance priority Option type Organization type Pass through type Payment type Proider rating Responsible party Roles Time zones Year The clause type classification contains a Clause Category field. Because the field alues are defined by the Application Administrator, do not change or add new alues. The field includes the following alues: Allowance Commission Copyright IBM Corp. 2011,

14 Cotenancy or co-tenancy Default Fair market rate alue Green proisions Insurance Landlord rights Legal and finance Other Parking Pass through Percentage rent Rent Responsibilities Rights Security deposit Tax Tenant rights Use and restrictions The Clause Category field dries the show-and-hide logic on the clause form. If you add a clause type and set the clause category, then the form shows or hides the appropriate sections without a change in the workflow. For more information, see the Classifications chapter in the IBM TRIRIGA 10 Application Administration User Guide book. Lists The application proides lists of predefined alues for many fields in its real estate and asset lease contracts. Because these lists contain alid data, you can select the required alue from the list instead of typing the alue. This method improes data integrity by restricting the field data to the approed list alues. The application supports the following types of lists: Radio-button lists, List-box lists of static alues, Dynamic lists that are deried from alues in the IBM TRIRIGA database, and Dependent lists in which the selection from one list passes a filter to another list. For example, a real estate lease includes the following lists: Accounting type Calculation rule Conersion group Country Currency Lease serice responsibility Note type Payment entry type Payment method 8 Copyright IBM Corp. 2011, 2012

15 Payment schedule Schedule type For more information, see the Lists chapter in the IBM TRIRIGA 10 Application Administration User Guide book. Locations Each location that is used in the application must be defined in the location hierarchy. With lease abstract records, you can add a location in the hierarchy by clicking the Create New Location action in the Primary Address section. The location hierarchy contains the following elements: Building External retail location Floor Land Location category Property Proposed retail location Proposed site Retail center Retail location Space Space group Structure Vertical shaft For more information, see the Locations chapter in the IBM TRIRIGA 10 Portfolio Management User Guide book. Contacts Each real estate contract record or asset lease record includes information about the arious contacts for that record. You can define these contacts beforehand, then select the contacts when you create or update a contract record. This method promotes data integrity by restricting the selection of contacts to a predefined set. You can also minimize your data entry by taking adantage of autocomplete or search. To define these contacts beforehand, enter their contact information in the People portal of the IBM TRIRIGA application. The elements contained in the People portal include: Consultant Employee External contact For more information, see the People chapter in the IBM TRIRIGA 10 Portfolio Management User Guide book. Chapter 3. Setting up contracts 9

16 Setting up templates You can use templates to quickly create records, aoid redundant data entry, and maintain consistency across many records. For example, you can quickly add data that is commonly reused across multiple records, such as internal contacts, clauses, terms, and conditions. When the template is applied, the details that are entered in the template are replicated in the new record. Creating templates You can build templates as a foundation from which to quickly create records. The process of building a template is similar for all templates. The following example uses the lease clause template. Before you begin You must sign in as an Application Administrator or Real Estate Contract Manager. About this task The templates that are used in the management of real estate contracts include: Lease abstract template Lease clause template Option template Owned property agreements template Real estate lease template Meanwhile, the templates that are used in the management of asset lease contracts include: Asset lease clause template Asset lease template Option template Procedure 1. Select Contracts > Set Up > Templates > Lease Clause. 2. Click the Add action. 3. Specify the details. 4. Create the template. What to do next The tabs, sections, and fields in the templates mirror the structure of the records that they represent. When building templates as a foundation for your contract management records, use standard IBM TRIRIGA templates as a model. In other words, instead of updating a standard template, copy it to build your new template from the original. Editing templates As you build and sae your templates, you can edit them as needed. The process of editing a template is similar for all templates. The following example uses the lease clause template. 10 Copyright IBM Corp. 2011, 2012

17 Before you begin You must sign in as an Application Administrator or Real Estate Contract Manager. Procedure 1. Select Contracts > Set Up > Templates > Lease Clause. 2. Click the link for the lease clause template that you want to edit. 3. Specify the details. 4. Sae the template. Deleting templates As you build and sae your templates, you can delete them as needed. The process of deleting a template is similar for all templates. The following example uses the lease clause template. Before you begin Setting up lease defaults You must sign in as an Application Administrator or Real Estate Contract Manager. Procedure 1. Select Contracts > Set Up > Templates > Lease Clause. 2. Select the check box for the lease clause template that you want to delete. 3. Delete the template. Many of the parameters that are used in arious calculations and comparisons can be set in one place for the entire application. The lease default parameters can be set in the application settings record. Setting up lease abstract defaults To enable certain actions in the lease abstract record, you can set the lease abstract defaults in the application settings record. These lease abstract defaults include the parent for an internal organization, external organization, and location. Before you begin You must sign in as an Application Administrator. About this task The lease abstract record includes the Create New Location action in the Primary Address section and the Create New Organization action in the Tenant, Landlord, Management Company, and Guarantor sections. These actions require the identification of the parent record in the hierarchy and automatically default to the parent record. Procedure 1. Select Tools > System Setup > General > Application Settings. 2. In the General tab, go to the Lease Abstract Defaults section. 3. Specify the settings. 4. Sae the record. Chapter 3. Setting up contracts 11

18 What to do next For more information, see the Application Settings chapter in the IBM TRIRIGA 10 Application Administration User Guide book. Setting up lease accounting defaults To simplify the entry of information in the real estate lease record, you can set the lease assumption and amortization defaults in the application settings record. These lease defaults include the reiew assumptions, lease growth assumptions, rent component assumptions, amortization periods, extended rent payments, and the time zone for payment schedules. Before you begin You must sign in as an Application Administrator. About this task You can also apply assumption reiew information to the initial assumption audit log when the real estate lease is created from the completed lease abstract. Procedure 1. Select Tools > System Setup > General > Application Settings. 2. In the Lease Accounting Settings tab, specify the settings. 3. Sae the record. What to do next Setting up OSCRE tools For more information, see the Application Settings chapter in the IBM TRIRIGA 10 Application Administration User Guide book. To use the lease abstract tools for the Open Standards Consortium for Real Estate (OSCRE), both your serer and the third-party serer must be configured. The configuration of the properties file, administrator console processes, and application settings record are typically completed by the application administrator. Oeriew of OSCRE process Typically, two application serers communicate to send and receie lease abstract records under the Open Standards Consortium for Real Estate (OSCRE) standard. For example, assume that you employed a third-party abstractor organization to abstract leases into their own serer. Assume that their application serer is named "Abstractor Serer" and your application serer is named "Customer Serer". The following oeriew describes the process. Configuration After configuration, the IBM TRIRIGA application is ready to support all of the actions in the OSCRE lease abstract standard: Send lease abstract Accept lease abstract Reject lease abstract 12 Copyright IBM Corp. 2011, 2012

19 Request lease abstract clarification Proide lease abstract clarification Abstractor sends the lease abstract The abstractor creates a lease abstract record on their IBM TRIRIGA serer called "Abstractor Serer". They sae the record as an external draft, edit the record, and submit it for reiew. The record is approed. Then, they reopen the lease abstract record and send it to the incoming account of your "Customer Serer". In "Abstractor Serer", the record updates to Sent status and the record is sent by . Figure 2. Flow diagram for sending the lease abstract under the OSCRE standard You receie the lease abstract You receie the lease abstract record in Receied status on your IBM TRIRIGA serer called "Customer Serer". You can open the record and accept it, reject it, or request clarification. If you accept it, the record updates to Accepted status. You can edit and actiate the lease abstract record in your "Customer Serer". If you reject it, the record updates to Rejected status. If you request clarification, the record updates to Pending Clarification status. You send the abstract status Your "Customer Serer" sends the record status to the incoming account of "Abstractor Serer". If the "Abstractor Serer" receies an acceptance, the record updates to Accepted status. If the "Abstractor Serer" receies a rejection, the record updates to Rejected status. If the "Abstractor Serer" receies a request for clarification, the record updates to Clarification Requested status. Chapter 3. Setting up contracts 13

20 Figure 3. Flow diagram for sending an acceptance under the OSCRE standard Abstractor sends the clarification When the abstractor decides to proide clarification, they reopen the clarification requested record, update it as needed, and send the record. The record updates to Clarification Proided status. Figure 4. Flow diagram for proiding clarification under the OSCRE standard You receie the clarification When your "Customer Serer" receies the proided clarification, the record updates to Clarification Proided status. You can decide to accept it, reject it, or request clarification again. The OSCRE processing for each lease abstract record might continue between the two IBM TRIRIGA serers until you decide to accept. After the lease abstract record is accepted, it can be edited or actiated. More information For more information, see the Current Use Space Classification subchapter in the IBM TRIRIGA 10 Portfolio Management User Guide book. You can also see the Space 14 Copyright IBM Corp. 2011, 2012

21 Classification subchapter in the IBM TRIRIGA 10 Space and Moe Management User Guide book. Setting up the properties file Seeral properties in the TRIRIGAWEB.properties file must be configured for the Open Standards Consortium for Real Estate (OSCRE). You must configure this properties file before you send lease abstract records or apply the OSCRE lease abstract tools for the first time. Before you begin You must be an IBM TRIRIGA administrator. Procedure 1. Configure the following properties of the TRIRIGAWEB.properties file on your serer: Property mail.smtp.host mail.smtp. .domain DATACONNECT _SLEEP_TIME DC_HISTORY _RETENTION_DAYS The simple mail transfer protocol (SMTP) mail serer. The Internet Protocol (IP) of the SMTP mail serer. The duration that the DataConnect tool waits before waking to check for more jobs to process. The default is 10 minutes. The age of completed or obsolete jobs that the DataConnect tool clears away. The default is 5 days. 2. Configure the same properties on the third-party serer. What to do next For more information, see the Properties Files subchapter in the IBM TRIRIGA Application Platform 3 Installation and Implementation Guide book. Setting up administrator processes Seeral processes must be configured for the Open Standards Consortium for Real Estate (OSCRE). You must configure these processes in the administrator console before you send lease abstract records or apply the OSCRE lease abstract tools for the first time. Before you begin You must be an IBM TRIRIGA administrator. Procedure 1. Use the IBM TRIRIGA administrator console to configure the following processes on your serer: a. The OSCRE.xml tools require the DataConnect and Incoming Mail agents to be running. Start them from the administrator console if they are not already started. You can also configure these processes in the TRIRIGAWEB.properties file to start automatically. b. For more-detailed logging during OSCRE.xml processing, turn on the logging for DataConnect, Incoming Mail, "Extract, Transform, and Load" (ETL), or a combination of these options. Chapter 3. Setting up contracts 15

22 2. Configure the same processes on the third-party serer. What to do next For more information, see the IBM TRIRIGA Application Platform 3 Administrator Console User Guide book. Setting up application settings Seeral and application settings must be configured for the Open Standards Consortium for Real Estate (OSCRE). You must configure these settings before you send lease abstract records or apply the OSCRE lease abstract tools for the first time. Before you begin You must be an IBM TRIRIGA administrator. Procedure 1. Configure the following settings on your serer: a. Configure the Internet Protocol (IP) address and alid incoming mail account for the serer. b. Select the address as the source or target system when you send a lease abstract, in the system configuration record. You can open this record from Tools > System Setup > Integration > System Configuration. c. Configure the user groups to include the IBM TRIRIGA Real Estate Lease Abstractor role and IBM TRIRIGA Real Estate Lease Abstract Manager role as appropriate. d. Configure the lease abstract notifications of accepted, clarification proided, clarification requested, receied, and rejected for specific user roles. You can open and reise these records from Tools > Approals & Notifications > Notifications > Notification Requirements. e. Verify that transformation content records exist for all OSCRE processes, such as accept, reject, send, request clarification, and proide clarification. You can create or open these records from Tools > Data Utilities > OSCRE XML Import. f. Verify that all transformation content files exist for all OSCRE processes, such as accept, reject, send, request clarification, and proide clarification, in the application settings record. You can open this record from Tools > System Setup > General > Application Settings. The Lease Abstract Transformation section is found in the General tab. 2. Configure the same settings on the third-party serer. What to do next For more information, see the Integration with External Applications chapter and Notifications chapter in the Application Building for the IBM TRIRIGA Application Platform 3 book. You can also see the Application Settings chapter and Notifications chapter in the IBM TRIRIGA 10 Application Administration User Guide book. 16 Copyright IBM Corp. 2011, 2012

23 Chapter 4. Creating lease abstracts Lease abstract records While digitally storing lease data can make updates and queries more efficient, inputting the full contents of a lease contract can also be time-consuming. Instead, you can create lease abstract records to summarize leases through manual data entry, Open Standards Consortium for Real Estate (OSCRE).xml files, or offline forms. To reduce the time it takes to input lease contracts, you can abstract or summarize their full contents in lease abstract records. The lease abstract record can contain as much of the actual lease details as you want, based on the preferences and standards of your organization. Contract creation process flow Figure 5. Flow diagram for creating the lease abstract Lease abstract creation As a lease abstractor, you can specify the entire lease contract and attach it as a file, or summarize key aspects of the lease contract. There are seeral data entry techniques: You can input lease abstract records into your IBM TRIRIGA system, A endor abstractor (in another IBM TRIRIGA system) inputs lease abstract records, and sends them to you through Open Standards Consortium for Real Estate (OSCRE).xml files, A endor abstractor (outside your IBM TRIRIGA system) specifies lease abstract records with the offline form, and s the form to you. Copyright IBM Corp. 2011,

24 Upon mutual agreement, the lease abstract record seres as a formal real estate lease record. After the lease abstract record is actiated, approed, and completed, it creates a real estate lease draft that is aailable for further transactions. As a result, the second record can separate security between outsourced and internal resources that are abstracting leases. In addition to these techniques, a lease abstract record can also be created upon the completion of a real estate lease project. The tabs, sections, and fields in a lease abstract record hae the same significance regardless of the method that is used to specify their data. Sae the lease abstract record after you specify the data and before you moe to the next tab. For more information, see the Transaction Types chapter in the IBM TRIRIGA 10 Real Estate Transaction Management User Guide book. Creating lease abstract records You can manually create lease abstract records to summarize the key details in lease contracts. Before you begin You must sign in as a Real Estate Abstractor or Real Estate Contract Manager. Procedure 1. Add the lease abstract. Role Real Estate Abstractor Real Estate Contract Manager Action In the Work in Progress Lease Abstracts portal section, click the Add New Abstract action. Select Contracts > Leases. In the Related Links Contract Leases portal section, click the Lease Abstracts link. Click the Add action. 2. Specify the general details. 3. Create the draft. 4. Specify the details for the lease clauses, schedules, accounting, and other information. 5. Sae the record. Creating lease abstract records by sending offline forms In some cases, the best option might be to send lease data through attachments. As an alternatie to directly specifying lease abstract records, you can Microsoft Excel offline forms to a configured incoming address. When the offline form reaches the target application, the data populates a new lease abstract record. Before you begin You must obtain the Real Estate Lease Abstract offline form and target address from the Application Administrator. The lease identifier (ID) of a lease 18 Copyright IBM Corp. 2011, 2012

25 abstract record must be unique. The target application rejects any imported lease abstract record with a lease identifier that matches a lease abstract record already in the database. For more information, see the Offline Excel Spreadsheets chapter in the Application Building for the IBM TRIRIGA Application Platform 3 book. You can also see the Offline Content chapter in the IBM TRIRIGA 10 Application Administration User Guide book. Procedure 1. In Microsoft Excel, open the Real Estate Lease Abstract offline form for a lease abstract record. 2. Specify the lease information in the offline form. 3. When the offline form is complete, erify in your application that the Lease ID field alue does not exist. If the Lease ID field alue does exist, reise the ID. 4. Click the Offline Form action. 5. Verify that the subject of the is LEASE ABSTRACT FORM. Creating lease abstract records by sending OSCRE.xml files In some cases, the best option might be to send lease data from your source application to the target application. As an alternatie to directly specifying lease abstract records, you can transmit Open Standards Consortium for Real Estate (OSCRE).xml files between applications. Before you begin You must sign in as a Real Estate Abstractor or Real Estate Contract Manager. Procedure 1. Add the lease abstract. Role Real Estate Abstractor Real Estate Contract Manager Action In the Work in Progress Lease Abstracts portal section, click the Add New Abstract action. Select Contracts > Leases. In the Related Links Contract Leases portal section, click the Lease Abstracts link. Click the Add action. 2. Specify the details. 3. Click the Create Draft External action. 4. Click the Start Abstract action. The status of the record changes to In Progress. 5. Specify any other data and click the Submit for Reiew action. The status of the record changes to Reiew In Progress. 6. After the status of the record changes to Approed, open the lease abstract record. 7. Click the Send action. Specify the comment, source application, and target application. 8. Click the Submit action. The status of the record changes to Sent. Chapter 4. Creating lease abstracts 19

26 Exporting lease abstract records by sending OSCRE.xml files The.xml export tool for the Open Standards Consortium for Real Estate (OSCRE) is an alternatie to clicking the Send action on a lease abstract record. For example, you might want to batch seeral records to send at a single time after they are submitted for reiew and approed. Typically, lease abstract records exported through OSCRE are receied directly into the IBM TRIRIGA serer through its incoming mail address. Before you begin You must sign in as an Application Administrator. In addition, erify that the lease abstract business object does not contain a field with a field name that includes any of following special characters: ~`!#$%&*()_+-={} []\: ;'<>?,./ Otherwise, if a special character is present, this process does not generate the OSCRE.xml file. If necessary, reise and republish the business object. Procedure 1. Select Tools > Data Utilities > OSCRE XML Export. 2. Click the Add action. 3. Specify the details. 4. Create the export record. 5. Process the export record. Form tabs The tabs at the top of the OSCRE XML Export form represent the different areas of the export record. This record is prepared according to the Open Standards Consortium for Real Estate (OSCRE) standard to export one or more lease abstract records as.xml files. Depending on your security access to the form, such tabs might include general information and system details. Common form tabs indicate tabs that are shared across many types of forms. You might not hae access to some of these elements. The elements to which you hae access depend on your job function and role within your company and how the application was implemented at your company. General tab: Use this tab of the OSCRE XML Export form to specify the lease abstracts to be exported through the Open Standards Consortium for Real Estate (OSCRE). In addition, specify the source system, target system, and other details. General section: Use this section of the OSCRE XML Export form to identify the status, name, and other general information for the export record. The export process follows the standards by the Open Standards Consortium for Real Estate (OSCRE). ID Status The unique identifier of the export record. If you do not proide an identifier, one is automatically generated. The status of the export record. 20 Copyright IBM Corp. 2011, 2012

27 Name The name of the export record. The brief description of the export record. Send details section: Use this section of the OSCRE XML Export form to identify the source system, target system, and other system details. The export process follows the standards by the Open Standards Consortium for Real Estate (OSCRE). Comment Source System Target System The brief description of the source and target details. The name of the system that sends the lease abstracts. To change the system, specify a few characters of the name to take adantage of autocomplete or click the Search icon find the name. The name of the system that receies the lease abstracts. To change the system, specify a few characters of the name to take adantage of autocomplete or click the Search icon find the name. to to Lease abstract section: Use this section of the OSCRE XML Export form to identify the lease abstracts to be exported through the Open Standards Consortium for Real Estate (OSCRE). Find Lease Abstract Remoe Lists the aailable information. Click this action on the section bar and select from the listed lease abstracts in Approed status. Click OK. Deletes a line item. Select the line item and click this action. Importing lease abstract records by sending OSCRE.xml files The.xml import tool for the Open Standards Consortium for Real Estate (OSCRE) is an alternatie to receiing a lease abstract record through from another serer. For example, a lease abstract record can be sent as an attachment to your address, instead of the incoming mail address of the IBM TRIRIGA serer. You can later upload the attached.xml file into the serer. Before you begin You must sign in as an Application Administrator. Procedure 1. Select Tools > Data Utilities > OSCRE XML Import. 2. Click the Add action. 3. Specify the details. 4. Create the import record. Chapter 4. Creating lease abstracts 21

28 5. Process the import record. After you process the import record, the record shows one of the following statuses: Status Waiting for DC Process DC Process Complete ETL Failed Indicates that the Extract, Transform, and Load (ETL) processing was successful. It also indicates that the.xml file is waiting to be processed by the IBM TRIRIGA DataConnect (DC) tool. Indicates that DataConnect (DC) processing was successful, and the.xml file was imported. Indicates that the ETL processing failed. Look in the serer log for more information. Form tabs The tabs at the top of the OSCRE XML Import form represent the different areas of the import record. This record is prepared according to the Open Standards Consortium for Real Estate (OSCRE) standard to import your lease abstract record as an.xml file. Depending on your security access to the form, such tabs might include general information and system details. Common form tabs indicate tabs that are shared across many types of forms. You might not hae access to some of these elements. The elements to which you hae access depend on your job function and role within your company and how the application was implemented at your company. General tab: Use this tab of the OSCRE XML Import form to specify the.xml file to be imported through the Open Standards Consortium for Real Estate (OSCRE). In addition, specify the type of import action, and other details. General section: Use this section of the OSCRE XML Import form to identify the status, name, and other general information for the import record. The import process follows the standards by the Open Standards Consortium for Real Estate (OSCRE). ID Date Time Status Name Transformation File The unique identifier of the import record. If you do not proide an identifier, one is automatically generated. The date and time when you first added the form for the import record. The status of the import record. The name of the import record. The brief description of the import record. The file that is separate from the OSCRE.xml file, and is generated after the import record is processed. There are 2 actions: View Content: Click this action to iew the file content. Download Transformation File: Click this icon to download the file. 22 Copyright IBM Corp. 2011, 2012

29 Type The type of the OSCRE import action, such as accept, reject, request clarification, lease abstract, and proide clarification. The selected option must match the actual OSCRE process. For example, if the.xml file is taken from a lease abstract record that was sent with the request clarification process, then select the request clarification type. DC Job Number The job number that is assigned to the record for the IBM TRIRIGA DataConnect (DC) tool. This number is automatically generated. OSCRE XML File The.xml file that contains the lease abstracts. There are 4 actions: Upload OSCRE XML file: Click this icon to upload the file. Clear OSCRE XML file: Click this icon to remoe the file. View Content: After the file is uploaded or processed, click this action to iew the file content. Download OSCRE XML file: After the file is uploaded or processed, click this icon to download the file. OSCRE log section: Use this section of the OSCRE XML Import form to iew the communication,.xml, and date-time information about the import as the import occurs. The import process follows the standards by the Open Standards Consortium for Real Estate (OSCRE). Form tabs The tabs at the top of the Lease Abstract form represent the different areas of a lease abstract record. Depending on your security access to the form, such tabs might include general information, notifications, system details, and reports. Common form tabs indicate tabs that are shared across many types of forms. You might not hae access to some of these elements. The elements to which you hae access depend on your job function and role within your company and how the application was implemented at your company. General tab Use this tab of the Lease Abstract form to specify the lease identifier, lease names, primary address, lease contacts, critical dates, and other details. Abstract details section Use this section of the Lease Abstract form to identify who abstracted the lease and when it was abstracted. Abstracted By Abstracted Date The name of the person who abstracted the lease. To change the name, specify a few characters of the name to take adantage of autocomplete or click the Search icon to find the name. The date when the lease was abstracted. To change the date, click the Calendar icon and select the date. Chapter 4. Creating lease abstracts 23

30 Document details section Use this section of the Lease Abstract form to identify the document ersion, document type, and other details of the physical document. Document Version Executed Date Document Type Effectie Date Lease File Name The ersion of the physical document. The date when the physical document was completed. Click the Calendar icon and select the date. The type of the physical document. Click the Search icon and select the type. The date when the physical document took effect. Click the Calendar icon and select the date. The name of the lease file. General section Use this section of the Lease Abstract form to identify the lease identifier, lease name, legal name, and other general information for the record. Lease ID Status Picture Lease Name Legal Name Reision Legacy ID The unique identifier of the lease abstract record. If you do not proide an identifier, one is automatically generated. For Open Standards Consortium for Real Estate (OSCRE) integrations to work, a unique identifier is required. The status of the lease abstract record. The image that represents the lease abstract record. Click the Upload Picture icon to select the image such as the photograph of the property. The name of the lease in the lease abstract record. The name of the landlord or organization name as specified in the legal documents. The brief description of the lease abstract record. The reision number of the lease abstract record. This alue indicates the number of times that the record was modified. The identifier that is related to the lease abstract record from a preious system or application. Primary address section Use this section of the Lease Abstract form to identify the address information from the lease. Create New Location Create New City Creates a location. If a location is missing from the location hierarchy, you can click this action on the section bar. Specify the details and click the Continue action. The form populates the location fields with the new location. Creates a city. If a city is missing from the location hierarchy, you can click this action. Specify the details and click the Continue action. The form populates the location fields with the new city. 24 Copyright IBM Corp. 2011, 2012

31 Location Lookup Location Geography Path Address City State/Proince County Zip/Postal Code Country The location on the lease, including the full path in the location hierarchy. Specify a few characters to take adantage of autocomplete or click the Search icon to find the location. The location on the lease. The geographic location on the lease, including the full path in the geographic hierarchy. Specify a few characters to take adantage of autocomplete or click the Search icon to find the location. The street address on the lease. The city on the lease. This field is automatically populated based on the selected geographic path. The state or proince on the lease. This field is automatically populated based on the selected geographic path. The county on the lease. The postal code on the lease. The country on the lease. This field is automatically populated based on the selected geographic path. Lease contacts section Use this section of the Lease Abstract form to identify the contact information for the lease. Add People Update Role Remoe Adds contacts. Click this action on the section bar and select from the listed people. Click OK. The form adds the line items in the section. Assigns a role to a person. Select the line item and click this action. The form shows the aailable roles. Select a role and click OK. Deletes a line item. Select the line item and click this action. Units section Use this section of the Lease Abstract form to identify the currency and area units from the lease. Currency Area Units The type of currency for all cost-related fields in the record. The form shows the default currency that is set by your administrator. The unit of measure (UOM) for all area-related fields in the record. Details section Use this section of the Lease Abstract form to identify the lease type, lease category, and other lease details. Chapter 4. Creating lease abstracts 25

32 Lease Type Lease Category Primary Use Contract Status Base Lease Rate Lease Base Year Memorandum of Lease Rules and Regulation Is Cost or Fair Market Value Determinable Is it Market-Based Accounting Type The type of the lease, in terms of expense, income, and sublease. Click the Search icon and select from the listed choices. There are 4 classifications: Expense lease: This option is the most common. Use it when you lease space from a landlord. Expense lease - master sublease: An expense lease that is used when you are subleasing space from another party. Income lease - sublease: An income-based or accounts receiable (AR) lease that is used when you hae an expense lease and you are subleasing part of it to another tenant. Income lease - third-party lease: An income-based or accounts receiable (AR) lease that is used when you own the property and hae subtenants for the tenants in the building. If the alue is an income lease (sublease or third-party lease), the form shows the Parent Real Estate Contract of Sublease section in the General tab. The category of the lease, in terms of net and gross. Click the Search icon and select from the listed choices. The main use of the lease, in terms of real estate. Click the Search icon and select from the listed choices. When the alue is retail, the form shows the Grand Open Date field and Soft Open Date field in the Critical Dates section. The status of the physical lease contract. Click the Search icon and select from the listed choices. The rate of the base lease. This base is the minimum lease amount. The unit of currency is set in the Units section. The base year of the lease. This base is the initial lease period. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. The type of the accounting method, such as accounts payable (AP) and accounts receiable (AR). Parent real estate contract of sublease section Use this section of the Lease Abstract form to identify the parent lease contract of this lease. The form shows this section when the alue of the Lease Type field is an income lease (sublease or third-party lease). Find Remoe Name Lists the aailable information. Click this action on the section bar and select from the listed lease contracts. Click OK. Erases the information. Click this action. The name of the parent real estate contract. Specify a few characters to take adantage of autocomplete. 26 Copyright IBM Corp. 2011, 2012

33 Critical dates section Use this section of the Lease Abstract form to identify the commencement, construction, expiration, and other dates from the lease. The form uses these dates to populate other fields in other sections and tabs in the lease abstract. If you hae auditable or percentage rent clauses, you must specify the Commencement Date field and Base Lease Expiration Date field to calculate the amount due for the occupied duration. Commencement Date Construction Start Date Base Lease Expiration Date Construction End Date Rent Commencement Date Occupancy Date Legal Notice Date Soft Open Date Grand Open Date The date when the lease term and the contracted work on the site begins. Click the Calendar icon and select the date. The date when actual construction on the site begins. Click the Calendar icon and select the date. The date when the base lease expires, without renewal options applied. Click the Calendar icon and select the date. The date when construction on the site ends. Click the Calendar icon and select the date. The date when the obligation to pay rent begins. Click the Calendar icon and select the date. The date when the tenant begins occupying the site. Click the Calendar icon and select the date. The date when the lease becomes legally alid. Click the Calendar icon and select the date. The date when the retail site begins to operate with minimal public promotion. If you selected retail for the Primary Use field in the Details section, the form shows this field. Click the Calendar icon and select the date. The date when the retail site makes the public announcement of its official opening. If you selected retail for the Primary Use field in the Details section, the form shows this field. Click the Calendar icon and select the date. Premise location section Use this section of the Lease Abstract form to identify the more-detailed locations at the primary address from the lease. Add Find Remoe Linked Record Premise Name Adds a location. Click this action on the section bar. The form adds a line in the section. Specify the details. Lists the aailable information. Click this action and select an existing location from the location hierarchy. Deletes a line item. Select the line item and click this action. Opens a line item. Click the Linked Record icon. The name of the premise at this location. Chapter 4. Creating lease abstracts 27

34 Included in Rent Effectie From Effectie To Rentable (lease) Usable (lease) Select the check box if the situation applies. Selecting this check box determines how the areas in the Total Rentable field and Total Usable field are calculated in the Location Summary section. The date when this line item begins to take effect. Click the Calendar icon and select the date. The date when this line item no longer takes effect. Click the Calendar icon and select the date. The oerall area aailable for rent in the property. The unit of measure is set in the Units section. The actual usable area in the property. The unit of measure is set in the Units section. Location summary section Use this section of the Lease Abstract form to identify the total areas of all of the premises, and the proportionate shares of the location. Total Rentable Total Usable Total Area for Proportionate Share Proportionate Share (contractual) Proportionate Share (calculated) The total area of rentable space from all of the premises at this location. When the record is saed, the form calculates this field from the line items in the Premise Location section that hae the Included in Rent check box selected. This field is also the default on the Generate Payment Schedules wizard form and is the key to calculating the Cost Per Area calculations. The total area of usable space from all of the premises at this location. When the record is saed, the form calculates this field from the line items in the Premise Location section that hae the Included in Rent check box selected. The total area of the location that is being abstracted. The unit of measure is set in the Units section. The percentage of the total rentable area that is represented by this location in the lease contract. The calculated percentage of the total rentable area that is represented by this location. When the record is saed, the form diides the area in the Total Rentable field by the area in the Total Area for Proportionate Share field. Location cost code section Use this section of the Lease Abstract form to identify the accounting cost classification of the lease location. Find Clear ID Name Lists the aailable information. Click this action on the section bar and select from the listed cost codes. Click OK. Erases the information. Click this action. The unique identifier of the cost code. Specify a few characters to take adantage of autocomplete. The name of the cost code. 28 Copyright IBM Corp. 2011, 2012

35 Tenant section Use this section of the Lease Abstract form to identify the tenant or lessee organization and the contact person to whom lease questions are directed. Create New Organization Tenant Contact Org Lookup Contact Lookup Creates an organization. If an organization that you are looking for is missing from the organization hierarchy, you can click this action on the section bar. Specify the details and click the Continue action. The form populates the organization fields with the new organization. The name of the tenant or lessee organization. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the organization. The form populates the tenant or lessee information from that organization record. The contact for the organization. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the contact. The form populates the contact information from that people record. Landlord section Use this section of the Lease Abstract form to identify the landlord or lessor organization and the contact person to whom lease questions are directed. Create New Organization Landlord/Owner Organization Lookup Contact Lookup Creates an organization. If an organization that you are looking for is missing from the organization hierarchy, you can click this action on the section bar. Specify the details and click the Continue action. The form populates the organization fields with the new organization. The name of the landlord, lessor, or owner organization that leases the property to the tenant. Specify a few characters to take adantage of autocomplete or click the Search icon to find the organization. The form populates the landlord, lessor, or owner information from that organization record. The contact for the organization. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the contact. The form populates the contact information from that people record. Management company section Use this section of the Lease Abstract form to identify the organization on the lease that is responsible for superising the functioning of the property. This section also identifies the contact person to whom property questions are directed. Create New Organization Creates an organization. If an organization that you are looking for is missing from the organization hierarchy, you can click this action on the section bar. Specify the details and click the Continue action. The form populates the organization fields with the new organization. Chapter 4. Creating lease abstracts 29

36 Management Organization Lookup Contact Lookup The organization that proides management serices for the lease. Specify a few characters to take adantage of autocomplete or click the Search icon to find the organization. The form populates the management company information from that organization record. The contact for the organization. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the contact. The form populates the contact information from that people record. Guarantor section Use this section of the Lease Abstract form to identify the cosigning organization on the lease and the contact person to whom lease questions are directed. Create New Organization Guarantor Organization Lookup Contact Lookup Creates an organization. If an organization that you are looking for is missing from the organization hierarchy, you can click this action on the section bar. Specify the details and click the Continue action. The form populates the organization fields with the new organization. The organization that guarantees the lease. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the organization. The form populates the guarantor information from that organization record. The contact for the organization. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the contact. The form populates the contact information from that people record. Default remit to section Use this section of the Lease Abstract form to identify the organization that receies the lease payment. Update Payment Instructions Remit To Look Up Updates the Remit To field on payment instructions that are attached to payment schedules for this lease abstract. To update those instructions with the default Remit To Look Up information, click this action on the section bar. The organization that receies the payment. Specify a few characters to take adantage of autocomplete, or click the Search icon to find the organization. The form populates the address information from that organization record. The organization selected in this section is used as the default in the payment instruction record for payment schedules associated to this lease. You can click the hyperlinked field label to iew or modify the record details. Abstract notifications section Use this section of the Lease Abstract form to identify any notifications that are sent, their types, and the roles that are notified. 30 Copyright IBM Corp. 2011, 2012

37 Add Remoe Adds a notification. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Additional notice addresses section Use this section of the Lease Abstract form to identify any related addresses that are not coered elsewhere in the record. Add Remoe Adds an address. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Real estate lease section When the lease abstract record is approed and completed, this section identifies the real estate lease record that is created from the abstract information. ID Name Lease Type Status The unique lease identifier of the real estate lease record. The name of the real estate lease record. The type of the lease for the real estate lease record, in terms of expense, income, and sublease. The status of the real estate lease record. Other dates section Use this section of the Lease Abstract form to identify any significant dates that are not coered elsewhere in the record. Add Linked Record Remoe Date Type Date Adds a date. Click this action on the section bar. The form adds a line in the section. Specify the details. Opens a line item. Click the Linked Record icon. Deletes a line item. Select the line item and click this action. The type of the lease date, such as construction start, grand open, occupancy, and soft open. Click the Search icon and select from the listed choices. The specific calendar date. Click the Calendar icon specify the date. The brief description of the date. and Lease abstract exceptions section Use this section of the Lease Abstract form to identify any issues such as missing, unsigned, or inconsistent documents, and errors in mathematics or dates. Chapter 4. Creating lease abstracts 31

38 Add Remoe Adds an exception. Click this action on the section bar. The form adds a line in the section. Click the line item to specify and sae the details. Deletes a line item. Select the line item and click this action. Rent tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each rent-related clause that you add. These rent-related clauses can include rent, percentage rent, and commission clauses. This tab also contains lease details, rent schedules, default index adjustment alues, percentage rent schedules, and commission schedules. Lease details section Use this section of the Lease Abstract form to identify the use of fair market rate alue, index adjustment, sales reports, and commissions. Lease Adjustment Type Does lease hae Sales Reporting requirements? Does lease hae Commissions Due? The type of the lease adjustment, such as fair market rate alue and index adjustment. If you select the fair market rate alue, the Rent tab shows the Fair Market Rate Value section. If you select the index adjustment, the Rent tab shows the Index Adjustments section. Select the check box if the situation applies. If selected, the Rent tab shows seeral sections. These sections include the Percentage Rent Clause, Percent Rent Setup, Sales Reporting Details, Sales Exclusions, Tax Exclusions, Allowable Deductions, and Percent Rent Schedules sections. Select the check box if the situation applies. If selected, the Rent tab shows the Commissions, Commission Schedules, and Commissions Clauses sections. Rent clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details that relate to the rent. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. and 32 Copyright IBM Corp. 2011, 2012

39 Abstract Notes The notes that are related to the legal document. Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Rent schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for the rent. Add Generate Payment Schedules Remoe Adds one rent schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Adds seeral rent schedules at one time. Click this action. Specify the details and click the Create Schedule action. The wizard form remains open for you to specify and create another schedule. When you close the wizard form, the lease abstract form adds the lines in the section. Deletes a line item. Select the line item and click this action. Historic payment schedules section Use this section of the Lease Abstract form to identify the frequency, start date, and other scheduling details from past rental schedules. The historical data cannot be manually added into the system, but must be generated from past rental data. Chapter 4. Creating lease abstracts 33

40 Fair market rate alue section Use this section of the Lease Abstract form to identify the monetary alue of the rate, adjustment frequency, and other related alues. The Rent tab shows this section if you selected the fair market rate alue for the Lease Adjustment Type field. This section proides the default alues for the Fair Market Rate Value section in other tabs of the lease abstract. Therefore, specify this information in the Rent tab before you specify the same information in other tabs. Percentage of Rate Rate Source Current Rate Current Rate Date Original Rate Original Rate Date Unit of Rate Adjustment Frequency Adjustment Reminder First Adjustment Date Minimum % Increase Lifetime Min % Increase Maximum % Increase Lifetime Max % Increase The current rate of the rental fair market alue. The source from which the current rate is obtained. Click the Search icon and select from the listed choices. The monetary alue of the current rate. The date when the current rate took effect. Click the Calendar icon to specify the date. The monetary alue of the original rate. The date when the original rate took effect. Click the Calendar icon to specify the date. The unit of area that applies to the monetary alue. The frequency at which the current rate is adjusted, such as annually, monthly, quarterly, and semi-annually. The duration before the system sends a reminder to you. Click the Calendar icon and specify the duration. The first date in the frequency at which the current rate is adjusted. Click the Calendar icon to specify the date. The minimum percentage that the current rate increases per adjustment. The minimum percentage that the current rate increases during the life of the lease. The maximum percentage that the current rate increases per adjustment. The maximum percentage that the current rate increases during the life of the lease. Index adjustments section Use this section of the Lease Abstract form to identify the cost index, index source, base index rate, adjustment frequency, and other related alues. The Rent tab shows this section if you selected the index adjustment for the Lease Adjustment Type field. This section proides the default alues for the Index Adjustment section in other tabs of the lease abstract. Therefore, specify and sae this information in the Rent tab before you specify the same information in other tabs. Similarly, if you select the Includes Index Adjustment check box in a clause, the clause shows the Index Adjustments section. 34 Copyright IBM Corp. 2011, 2012

41 Cost Index Index Source Base Year Base Index Date Base Index (Percent) Index Percent at Base Year Adjustment Frequency Adjustment Reminder First Adjustment Date Frequency Type Minimum % Increase Lifetime Min % Increase Maximum % Increase Lifetime Max % Increase The current index by which the rental costs are adjusted. Click the Search icon and select from the listed choices. The source from which the current index is obtained. The original year during which the costs are adjusted. The date when the original index took effect. Click the Calendar icon to specify the date. The percentage of the original index. The percentage of the current index during the original year. The frequency at which the current index is adjusted, such as annually, monthly, quarterly, and semi-annually. The duration before the system sends a reminder to you. Click the Calendar icon and specify the duration. The first date in the frequency at which the current index is adjusted. Click the Calendar icon to specify the date. The frequency at which the current index is applied. Click the Search icon and select from the listed choices. The minimum percentage that the current index increases per adjustment. The minimum percentage that the current index increases during the life of the lease. The maximum percentage that the current index increases per adjustment. The maximum percentage that the current index increases during the life of the lease. The description of the index adjustments that are inoled. Percentage rent clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details of the percentage rent. The rent is calculated as a percentage of the annual sales that are made by the tenant in or from the premises. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Find Template Clear Applies a template with default data to this section. Click this action on the section bar. Erases the information. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Chapter 4. Creating lease abstracts 35

42 Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Percent rent setup section Use this section of the Lease Abstract form to identify the reporting dates, reporting frequency, and other details of the percentage rent. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Clear First Reporting Period Start Date Erases the information. Click this action on the section bar. The date when the first reporting period is due to start. Click the Calendar icon and select the date. 36 Copyright IBM Corp. 2011, 2012

43 Reporting Frequency First Reporting Period End Date Billing Frequency Reporting Only Natural Breakpoint Due Within Cumulatie Landlord Audit Rights The frequency at which the rent reporting occurs, such as annually, monthly, quarterly, or semi-annually. The date when the first reporting period is due to end. Click the Calendar icon and select the date. The frequency at which billing occurs. Click the Search icon and select from the listed choices. Select the check box if this situation applies to the rent reporting. The point where the base rent equals the percentage rent. Select the check box if this situation applies to the rent reporting. The duration within which the rent reporting is due. Click the Calendar icon and select the duration. The accumulated data that is collected oer a duration. Select the check box if this situation applies to the rent reporting. The right of the landlord to conduct a lease audit. Select the check box if this situation applies to the rent reporting. The additional details for the percentage rent reporting. Sales reporting details section Use this section of the Lease Abstract form to identify the effectie dates, base sales amounts, and other details of the reported sales. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Add Adds a sales line item. Click this action on the section bar. The form adds a line in the section. Specify the details. Remoe Deletes a line item. Select the line item and click this action. Linked Record Opens a line item. Click the Linked Record icon. Sales Category The category of this sales line item. Click the Search icon and select from the listed choices. Effectie From The date when this sales line item goes into effect. Click the Calendar icon and select the date. Effectie To The date when this sales line item is no longer in effect. Click the Calendar icon and select the date. Base Sales From The lower limit amount that applies to this sales line item. Base Sales To The upper limit amount that applies to this sales line item. % Rent The rental percentage that applies to this sales line item. Sales exclusions section Use this section of the Lease Abstract form to identify the exclusion category and cap amount for the sales that are excluded from reporting. Chapter 4. Creating lease abstracts 37

44 If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Add Remoe Linked Record Sales Category Exclusion Category Cap Amount Adds a sales line item. Click this action on the section bar. The form adds a line in the section. Specify the details. Deletes a line item. Select the line item and click this action. Opens a line item. Click the Linked Record icon. The category of this sales line item. Click the Search icon and select from the listed choices. The category of this sales exclusion. Click the Search icon and select from the listed choices. The maximum amount that applies to this sales exclusion. Tax exclusions section Use this section of the Lease Abstract form to identify the tax type and tax rate for the taxes that are excluded from reporting. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Add by Tax Type Remoe Linked Record Tax Type Tax Rate Adds a tax line item. Click this action on the section bar. Select from the listed choices and click OK. The form adds a line in the section. Specify the details. Deletes a line item. Select the line item and click this action. Opens a line item. Click the Linked Record icon. The type of the tax, such as city, local, and state. The percent rate that applies to this tax exclusion. Allowable deductions section Use this section of the Lease Abstract form to identify the payment type and cap amount for allowable tax deductions. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Add by Payment Type Remoe Linked Record Payment Type Cap Amount Adds a deduction line item. Click this action on the section bar. Select from the listed choices and click OK. The form adds a line in the section. Specify the details. Deletes a line item. Select the line item and click this action. Opens a line item. Click the Linked Record icon. The type of the serice or item that is being paid for, such as administratie fees, heating charges, operating expenses, and signage rent. The maximum amount that applies to this allowable tax deduction. 38 Copyright IBM Corp. 2011, 2012

45 Percent rent schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for the percentage rent. If you select the Does lease hae Sales Reporting requirements? check box, the Rent tab shows additional sections that include this one. Add Generate Payment Schedules Remoe Adds one rent schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Adds seeral rent schedules at one time. Click this action. Specify the details and click the Create Schedule action. The wizard form remains open for you to specify and create another schedule. When you close the wizard form, the lease abstract form adds the lines in the section. Deletes a line item. Select the line item and click this action. Commissions section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for commissions. If you select the Does lease hae Commissions Due? check box, the Rent tab shows additional sections that include this one. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Commissions Clauses section. After specifying the commissions clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all commissions clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Chapter 4. Creating lease abstracts 39

46 Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Commissions Details. This area of the clause captures the commission requirements, dates, and other alues. Requirements Percent Expected Amount Due Date Paid Date Receipt Date Amount Due The requirements for the commission. The percentage of the commission. The amount of expected commission. The unit of currency is taken from the General tab. The date when the commission is due. Click the Calendar icon and select the date. The date when the commission is paid. Click the Calendar icon and select the date. The date when the commission is receied. Click the Calendar icon and select the date. The remaining amount that is due. The unit of currency is taken from the General tab. Commission schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for commissions. If you select the Does lease hae Commissions Due? check box, the Rent tab shows additional sections that include this one. 40 Copyright IBM Corp. 2011, 2012

47 Add Remoe Adds one commission schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Commissions clauses section Use this section of the Lease Abstract form to adjust the list of commissions clauses in the lease. If you select the Does lease hae Commissions Due? check box, the Rent tab shows additional sections that include this one. Hide Wizard Find Template Remoe Closes the wizard in the Commissions section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Default tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each monetary-default clause that you add. Default clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for monetary default. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Default Clauses section. After specifying the monetary-default clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all monetary-default clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 41

48 Section Page Abstract Notes The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Default Clause Details. This area of the clause captures the monetary-default requirements, durations, and other alues. Default Clause Details The required and releant monetary-default information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Default clauses section Use this section of the Lease Abstract form to adjust the list of monetary-default clauses in the lease. Hide Wizard Closes the wizard in the Default Clause section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. 42 Copyright IBM Corp. 2011, 2012

49 Find Template Remoe Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Security deposit tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each security-deposit clause that you add. Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for security deposits. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Security Deposit Clauses section. After specifying the security-deposit clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all security-deposit clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 43

50 Allowance Type, CAM Type, Insurance Type, Tax The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Type, orco-tenancy Type Search icon and select from the listed choices. Includes Index Adjustment Clause Summary Clause Text Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Deposit Details. This area of the clause captures the security-deposit requirements, dates, and other alues. Deposit Details The required and releant deposit information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Cash cost code section Use this section of the Lease Abstract form to identify the accounting cost classification for cash payments. Find Clear ID Name Lists the aailable information. Click this action on the section bar and select from the listed cost codes. Click OK. Erases the information. Click this action. The unique identifier of the cost code. Specify a few characters to take adantage of autocomplete. The name of the cost code. Expense cost code section Use this section of the Lease Abstract form to identify the accounting cost classification for expenses. Find Clear ID Name Lists the aailable information. Click this action on the section bar and select from the listed cost codes. Click OK. Erases the information. Click this action. The unique identifier of the cost code. Specify a few characters to take adantage of autocomplete. The name of the cost code. 44 Copyright IBM Corp. 2011, 2012

51 Security deposit clauses section Use this section of the Lease Abstract form to adjust the list of security deposit clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Clause Details section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Options tab Use this tab of the Lease Abstract form to specify the option type, option text, and other details for each tenant-renewal option that you add. You can also use the Option wizard form to add more options. Instructions section Use this section of the Lease Abstract form to access the Option Wizard action. You can add multiple options to the Tenant Renewal Options section or Other Options section. Option Wizard Opens the Option wizard form. Click this action on the section bar. Specify the details and click the Create Option action. The wizard form remains open for you to specify another option. When you close the wizard form, the lease abstract form adds the lines in the Tenant Renewal Options section or Other Options section. Tenant renewal options section Use this section of the Lease Abstract form to identify the option type, effectie date, expiration date, and other option details for tenant renewals. Add Remoe Adds an option. Click this action on the section bar. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Other options section Use this section of the Lease Abstract form to identify the option type, effectie date, and other option details for additional options. Add Remoe Adds an option. Click this action on the section bar. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Chapter 4. Creating lease abstracts 45

52 Rights tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each rights-related clause that you add. These rights-related clauses can include alteration, assignment, subletting, holdoer, signage, and restoration obligations. Alterations section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for physical alterations. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Alterations Clauses section. After specifying the alteration clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all alteration clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. 46 Copyright IBM Corp. 2011, 2012

53 Includes Index Adjustment Clause Summary Clause Text Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Alteration Details. This area of the clause captures the physical-alteration requirements and other alues. Alteration Details The required and releant alteration information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Alterations clauses section Use this section of the Lease Abstract form to adjust the list of alterations clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Alterations section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Assignment and subletting section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for lease assignment and subletting. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 47

54 Section Page Abstract Notes The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Assignment and Subletting Details. This area of the clause captures the assignment-subletting requirements, duration, and other alues. Assignment and Subletting Details The required and releant assignment and subletting information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. The abbreiation "LL" denotes the landlord. Holdoer section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for holdoer tenancy. Document References. This area of the clause identifies where to go in the legal document to find the clause details. 48 Copyright IBM Corp. 2011, 2012

55 Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Holdoer Details. This area of the clause captures the holdoer-tenancy penalties, duration, and other alues. Holdoer Details The required and releant holdoer information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Other rights section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for any additional rights. Chapter 4. Creating lease abstracts 49

56 Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Other Rights Details section. After specifying the clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all additional clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. 50 Copyright IBM Corp. 2011, 2012

57 Other Rights Details. This area of the clause captures the requirements, dates, and other alues for any additional rights. Other Rights Details The required and releant rights information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Other rights details section Use this section of the Lease Abstract form to adjust the list of additional rights clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Other Rights section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Signage section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for tenant signage. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 51

58 Allowance Type, CAM Type, Insurance Type, Tax The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Type, orco-tenancy Type Search icon and select from the listed choices. Includes Index Adjustment Clause Summary Clause Text Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Signage Details. This area of the clause captures the tenant-signage requirements and other alues. Signage Details The required and releant signage information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. The abbreiation "LL" denotes the landlord. The abbreiation "PRS" denotes the percentage rent. Restoration obligations section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for premises restoration. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and 52 Copyright IBM Corp. 2011, 2012 Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open.

59 Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Restoration Obligation Details. This area of the clause captures the premises-restoration requirements, duration, and other alues. Restoration Obligation Details The required and releant restoration information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Allowances tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each allowance clause that you add. Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for allowances and improements. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Allowance Clauses section. After specifying the allowance clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all allowance clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Chapter 4. Creating lease abstracts 53

60 Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Improement Clause Details. This area of the clause captures the restrictions, dates, and other alues for allowances and improements. Improement Clause Details The required and releant allowances and improements information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. The abbreiation "LL" denotes the landlord. The abbreiation "TI" denotes the tenant improement. 54 Copyright IBM Corp. 2011, 2012

61 Allowance clauses section Use this section of the Lease Abstract form to adjust the list of allowance and improement clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Clause Details section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. OPEX/CAM tab Use this tab of the Lease Abstract form to specify the clause details for each operating expenses (OPEX) and common area maintenance (CAM) clause. This tab also contains serices included, serices excluded, and CAM schedules. Clause details section Use this section of the Lease Abstract form to identify the document references, and other clause details for operating expenses (OPEX) and common area maintenance (CAM). Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the CAM Clauses section. After specifying the CAM clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all CAM clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Chapter 4. Creating lease abstracts 55

62 Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. CAM audit setup section Use this section of the Lease Abstract form to identify the base year, payment frequency, and other details for the common area maintenance (CAM) audit setup. Sae Setup Base Year Reconciliation Frequency Base Cost/Sq ft. Payment Frequency Base Year Cap Amount Reconciliation Start Cap Type First Billing End Date Cap Growth % Saes the information in the section. Click this action on the section bar. The base year of the lease. This base is the initial lease period. The frequency of the payment reconciliation, such as annually, semi-annually, quarterly, and monthly. The base cost per area (in square feet) of the lease payment. The frequency of the payments, such as 13-period, annually, monthly, and weekly. Click the Search icon and select from the listed choices. The maximum amount for the base year of the lease. The date when reconciliation begins. Click the Calendar icon and select the date. The type of the maximum alue, such as the amount or percentage. Click the Search icon and select from the listed choices. The date when the first billing period ends. Click the Calendar icon and select the date. The maximum percentage for the growth rate of the lease payment. 56 Copyright IBM Corp. 2011, 2012

63 Landlord Assessment Deadline Min Percent Increase Tenant Reconciliation Deadline Max Percent Increase Responsible for Expansion Increases Calculation Rule Proof of Payment Required Index Type Supporting Documents Required Index Base Landlord Credit Allowed Administration Fee % Pro Rata Method Current Year Cap The duration within which the reconciliation assessment by the landlord or lessor is due. Click the Calendar icon and specify the duration. The minimum percentage for the increase in the lease payment. The duration within which the reconciliation by the tenant or lessee is due. Click the Calendar icon and specify the duration. The maximum percentage for the increase in the lease payment. Select the check box if the situation applies. The rule that calculates the current year costs, based on the prorated share due (P/S), preious year charges (Pre. Yr.), base year cap amount (Base), or a combination of these alues. The abbreiation "CPI" denotes the consumer price index. Select from the 6 rules: Rule 1: The lower of Prorated Share Due or (Preious Year Charges x Cap Growth %). Rule 2: The lower of Prorated Share Due or (Base Year Cap Amount x (Number of Years x Cap Growth %)). Rule 3: The lower of (Preious Year Charges x CPI %) or (Preious Year Charges x Cap Growth %). Rule 4: The lower of (Preious Year Charges x CPI %) or (Base Year Cap Amount x (Number of Years x Cap Growth %)). Rule 5: The lowest of Prorated Share Due or (Base Year Cap Amount x (Number of Years x Increase %)) or (Preious Year Charges x Cap Growth %). Rule 6: The lowest of Prorated Share Due or (Preious Year Charges x Increase %) or (Preious Year Charges x CPI Increase %). Select the check box if the situation applies. The type of the index, such as the consumer price index (CPI), producer price index (PPI), or other local index. Click the Search icon and select from the listed choices. Select the check box if the situation applies. The index percentage for the base year of the lease. Select the check box if the situation applies. The percentage for the administration fee in the lease payment. The method of prorating the lease payment, such as fixed, leased area, 30-day basis, 31-day basis, 360-day basis, and 365-day basis. Click the Search icon and select from the listed choices. The maximum amount for the current year of the lease. Chapter 4. Creating lease abstracts 57

64 Pro Rata Negotiated (Percent) Credit Balance Expense Exclusions The negotiated percentage of prorating the lease payment. The amount of the payments that is more than the calculated amount, as of the preious due date. The exclusion of specific expenses from the lease payment. Serices included section Use this section of the Lease Abstract form to identify the cost, proportionate share, and other details for the serices that are included in the lease. Find Remoe Serice Estimated Cost Proportionate Share Apply to Total Cap Serice Cap Amount Finds an existing serice. Click this action on the section bar and select from the listed choices. Deletes a line item. Select the line item and click this action. The serice that is included in the lease, such as janitorial, snow remoal, and electric. The estimated annual cost for this included serice. The percentage share of this included serice compared to all included serices. If the contractual alue is not proided or equals zero, then the calculated alue is used. If the contractual alue is proided, then that alue is used. Select this check box if this included serice is counted against the total cap for all included serices. The maximum amount that applies to this included serice. A zero alue indicates that there is no cap amount. The unit of currency is taken from the General tab. Serices excluded section Use this section of the Lease Abstract form to identify the serices that are excluded from the lease. Find Remoe Serice Finds an existing serice. Click this action on the section bar and select from the listed choices. Deletes a line item. Select the line item and click this action. The serice that is excluded from the lease, such as janitorial, snow remoal, and electric. CAM schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for common area maintenance (CAM). Add Adds one CAM schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. 58 Copyright IBM Corp. 2011, 2012

65 Generate Payment Schedules Remoe Adds seeral CAM schedules at one time. Click this action. Specify the details and click the Create Schedule action. The wizard form remains open for you to specify and create another schedule. When you close the wizard form, the lease abstract form adds the lines in the section. Deletes a line item. Select the line item and click this action. CAM clauses section Use this section of the Lease Abstract form to adjust the list of operating expenses (OPEX) and common area maintenance (CAM) clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Clause Details section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Insurance tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each insurance clause that you add. This tab also contains insurance schedules. Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for property insurance. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Insurance Clauses section. After specifying the insurance clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all insurance clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 59

66 Section Page Abstract Notes The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Insurance Clause Details. This area of the clause captures the property-insurance requirements, dates, and other alues. Insurance Clause Details The required and releant insurance information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Insurance schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for property insurance. Add Adds one insurance schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. 60 Copyright IBM Corp. 2011, 2012

67 Generate Payment Schedules Remoe Adds seeral insurance schedules at one time. Click this action. Specify the details and click the Create Schedule action. The wizard form remains open for you to specify and create another schedule. When you close the wizard form, the lease abstract form adds the lines in the section. Deletes a line item. Select the line item and click this action. Insurance clauses section Use this section of the Lease Abstract form to adjust the list of insurance clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Clause Details section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Tax tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each tax clause that you add. This tab also contains tax schedules. Tax clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for property taxes. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Tax Clauses section. After specifying the tax clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all tax clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 61

68 Section Page Abstract Notes The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Tax Details. This area of the clause captures the property-tax requirements, rate, and other alues. Taxes Paid Via Tax Authority Tax ID Tax Rate % Does Tenant Hae Right to Appeal Tax Are Discounts Entitled Is Attorney Required for Appeals The method by which taxes are paid, such as landlord reimbursement and the taxing authority. The organization with the authority to collect the taxes. The unique identification number that is assigned to the taxpayer. The percentage rate of the tax. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. 62 Copyright IBM Corp. 2011, 2012

69 Annual Appeals Deadline Are Appeal Fees Included in Pro-Rata Are Consulting Fees Included in Pro-Rata Taxes Paid Directly to Municipality If Taxes Reimbursed, Landlord Required to Proide Tax Bill Right to Contest Taxes The duration until the tax appeal deadline is reached. Click the Calendar icon and specify the duration. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. Tax schedules section Use this section of the Lease Abstract form to identify the payment frequency, start date, end date, and other scheduling details for property taxes. Add Generate Payment Schedules Remoe Adds one tax schedule at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Adds seeral tax schedules at one time. Click this action. Specify the details and click the Create Schedule action. The wizard form remains open for you to specify and create another schedule. When you close the wizard form, the lease abstract form adds the lines in the section. Deletes a line item. Select the line item and click this action. Tax clauses section Use this section of the Lease Abstract form to adjust the list of tax clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Tax Clause section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Parking tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for the parking clause. This tab also contains the type of parking space, number of parking spaces, parking rate, and other parking details for each space type that you add. Chapter 4. Creating lease abstracts 63

70 Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for ehicle parking. Find Template Applies a template with default data to this section. Click this action on the section bar. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. 64 Copyright IBM Corp. 2011, 2012

71 Parking Details. This area of the clause captures the total number of parking spaces, and other alues. Included in Rent Landlord or Third Party Total Parking Spaces Select the check box if the situation applies. The party that is responsible for the parking spaces, such as landlord and third party. The total number of parking spaces that is calculated from the Space Types section. Space types section Use this section of the Lease Abstract form to identify the location, number, rate, and other alues for each type of parking space in the lease. Quick Add Remoe Linked Record Space Type Include in Parking Space Count Location Parking Denominator Number of Spaces Rate Adds a space type. Click this action on the section bar. The form adds a line in the section. Specify the details. Deletes a line item. Select the line item and click this action. Opens a line item. Click the Linked Record icon. The type of the parking space, such as bicycle, coered, executie, and resered. The alue determines whether the number of parking spaces for this space type is included in the total number of parking spaces. The location of the parking spaces on the property. The rate denominator for this space type, such as spaces per 100 and spaces per The rate denominator is applied to the rate cost. The number of parking spaces for this space type. The rate cost that is related to this space type. Co-tenancy tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for the co-tenancy clause. This tab also contains the effectie dates, sales percentage, rent reduction, and other details for each co-tenant that you add. Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for property co-tenancy. Find Template Applies a template with default data to this section. Click this action on the section bar. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Chapter 4. Creating lease abstracts 65

72 Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Co-Tenancy Details. This area of the clause captures the co-tenancy rent reduction, termination, and other alues. Co-Tenancy Details The required and releant co-tenancy information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Co-tenancy item section Use this section of the Lease Abstract form to identify the effectie dates, rent reduction, and other alues for each co-tenant in the lease. 66 Copyright IBM Corp. 2011, 2012

73 Add Co-Tenancy Sae Co-Tenancy Clear Wizard Adds the just-completed item to the Co-Tenancy s section. After specifying the co-tenant information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next item. Continue to build and add items until all co-tenants are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Co-tenancy items section Use this section of the Lease Abstract form to adjust the list of co-tenants in the lease. Hide Wizard Remoe Closes the wizard in the Clause Details section and Co-Tenancy section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Deletes a line item. Select the line item and click this action. Green lease proisions tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each green-lease clause that you add. This tab also contains the credential type, certifying body, and other details for each green credential that you add. Green lease proisions clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for green lease proisions. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Green Lease Proision Clauses section. After specifying the green-lease clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all green-lease clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 67

74 Granted In Lease Section Page Abstract Notes The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Green Lease Proision Clause Details. This area of the clause captures the green-lease requirements, access to property, and other alues. Green Lease Proision Clause Details The required and releant green-lease information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Green lease proision clauses section Use this section of the Lease Abstract form to adjust the list of green lease proision clauses in the lease. 68 Copyright IBM Corp. 2011, 2012

75 Hide Wizard Find Template Remoe Closes the wizard in the Green Lease Proisions Clause section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Credentials section Use this section of the Lease Abstract form to identify the credential type, certifying body, leel, and other alues for each green-lease credential in the lease. Add Remoe Adds a credential. Click this action on the section bar. The form adds a line in the section. Specify the details. Deletes a line item. Select the line item and click this action. Responsibilities tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for the serice responsibility clause. This tab also contains the serice, responsibility type, responsible parties, and other details for each serice responsibility that you add. Clause details section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for serice responsibilities. Find Template Applies a template with default data to this section. Click this action on the section bar. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Chapter 4. Creating lease abstracts 69

76 Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type Includes Index Adjustment Clause Summary Clause Text The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Responsibility serice section Use this section of the Lease Abstract form to identify the responsible party, primary endor, and other alues for each serice responsibility in the lease. Add Responsibility Sae Responsibility Clear Wizard Responsibility Serice Adds the just-completed item to the Responsibility Serices section. After specifying the serice information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next item. Continue to build and add items until all serices are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. The required and releant serice-responsibility information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Responsibility serices section Use this section of the Lease Abstract form to adjust the list of serice responsibilities in the lease. Hide Wizard Closes the wizard in the Clause Details section and Responsibility Serice section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. 70 Copyright IBM Corp. 2011, 2012

77 Remoe Deletes a line item. Select the line item and click this action. Other clauses tab Use this tab of the Lease Abstract form to specify the document reference, clause summary, and other clause details for each clause that you add. Other clause section Use this section of the Lease Abstract form to identify the document references, clause summary, and other clause details for additional clauses. Add Clause Sae Clause Clear Wizard Adds the just-completed clause to the Other Clauses section. After specifying the clause information, click this action on the section bar. The information that you specified remains so that you do not hae to retype the information for the next clause. Continue to build and add clauses until all other clauses are represented. Saes the information in the wizard. Click this action. Erases the information in the wizard. Click this action. Document References. This area of the clause identifies where to go in the legal document to find the clause details. Document Type Granted In Lease Section Page Abstract Notes The type of legal document, such as an amendment, lease, notice letter, and sublease. Click the Search icon and select from the listed choices. The legal status of this clause. Click the Search icon select from the listed choices. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The notes that are related to the legal document. and Clause Details. This area of the clause summarizes and captures the clause text in the legal document. This section shows a different set of clause details that depend on the specific clause that you open. Clause Type Allowance Type, CAM Type, Insurance Type, Tax Type, orco-tenancy Type The type of the clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. The type of the specific clause. Depending upon the clause, the form might not show this field. If aailable, click the Search icon and select from the listed choices. Chapter 4. Creating lease abstracts 71

78 Includes Index Adjustment Clause Summary Clause Text Depending upon the clause, the form might not show this field. Select this check box if the situation applies. The form shows the Index Adjustment section when the clause is created. Before you specify data in other clauses, specify the default index adjustment alues on the Index Adjustment section of the Rent tab. When you select this check box and default data is aailable, the form copies the data into the Index Adjustment section of the current clause. Then, you can edit the default data. The summary of the clause text from the legal document. The text of the specific clause from the legal document. Depending upon the clause, the form might not show this field. If aailable, specify the clause text from the legal document. Other Clause Details. This area of the clause captures the effectie dates, area, and other alues. Other Clause Details The required and releant clause information from the lease contract. For assistance, consult your lease administrator, lease accountant, or lease contacts. Other clauses section Use this section of the Lease Abstract form to adjust the list of additional clauses in the lease. Hide Wizard Find Template Remoe Closes the wizard in the Other Clause section. Click this action on the section bar. When the wizard is hidden, this section shows the Show Wizard action. Applies a clause template with default data to this section. Click this action. Select from the listed choices and click OK. The form adds a line in the section. Deletes a line item. Select the line item and click this action. Accounting tab Use this tab of the Lease Abstract form to specify the accounting details, borrowing rate, growth assumptions, rent component assumptions, and likely term option. This tab also calculates the Financial Accounting Standards Board (FASB) treatment of "Capital" or "Operating" for the lease. The form shows this tab only if you hae access as a Lease Accountant or Lease Accounting Manager role with a Real Estate Manager license. For more information, see the Lease Accounting Manager subsection in the IBM TRIRIGA 10 Getting Started User Guide book. Accounting details section Use this section of the Lease Abstract form to identify the accounting type, accounting dates, initial costs, and other details for lease accounting. 72 Copyright IBM Corp. 2011, 2012

79 Accounting Type Spend Category Accounting Start Date Accounting Cost Center Accounting End Date Create Straight Line Adjustments Operating Portion of Capital Lease Straight Line Capital Portion of Rent Initial Direct Costs The type of the accounting method for this lease, such as accounts payable (AP) and accounts receiable (AR). The acquisition or disposition category for this lease. Click the Search icon and select from the listed choices. The date when accounting begins. The form populates this date from the Commencement Date field. To change the date, click the Calendar icon and select the date. The responsible cost center. Specify a few characters to take adantage of autocomplete, or click the Search icon and select from the listed choices. The date when accounting ends. The form populates this date from the Expiration Date field. To change the date, click the Calendar icon and select the date. Select the check box if the situation applies. The straight-line calculation takes the accounting start and end dates to determine the duration. These dates are populated from the lease commencement and expiration dates of the specific lease. You can change these dates to include renewal periods or extensions. This calculation also includes free rent (or rent abatement) periods. If there are payments within any day in a month of the accounting dates on the lease, the straight-line calculation uses the full month. Straight-line adjustments are made to payment line items as accrual amounts. The percentage for the operating portion. The interal of the straight-line calculation, such as annually, monthly, quarterly, and semi-annually. The direct costs at the start of the lease. The unit of currency is taken from the General tab. Borrow rate and % growth assumptions section Use this section of the Lease Abstract form to identify the incremental borrowing rate, index growth percentage, and fair market rental alue (FMRV) growth percentage. Incremental Borrowing Rate Index Growth % FMRV Growth % The percentage for the borrowing rate. The percentage for the growth rate. The form shows this field if the lease abstract record contains an index-based clause. The percentage for the growth rate. The form shows this field if the lease abstract record contains an FMRV-based clause. Rent component assumptions section Use this section of the Lease Abstract form to identify the maintenance, tax, base-rent, and other portions of the lease payment. If the Lease Category field selection (in the General tab) contains the term Gross, the form shows this section. Chapter 4. Creating lease abstracts 73

80 % Is Maintenance The percentage for the maintenance portion of the lease payment. %IsTax The percentage for the tax portion of the lease payment. % Is Other The percentage for other (non-rental) costs in the lease payment. % Is Base Rent The form calculates the percentage for the base-rent portion of the lease payment, as 100% minus the three preious percentages. Likely term section Use this section of the Lease Abstract form to identify the likely term end date. Likely Term Option The method to define the likely term end date. There are 3 choices: Manual entry: The Likely Term End Date field becomes actie. Select the likely term end date. Select an option for likely term: The form shows the Options section and Likely Term Option section. Select the likely term option to define the likely term end date. Use lease expiration date: The form applies the Base Lease Expiration Date field (in the General tab) as the likely term end date. Likely Term End Date This field becomes actie if the Likely Term Option field selection is manual entry. Click the Calendar icon and select the date. Options section Use this section of the Lease Abstract form to identify the likely term option that defines the likely term end date. Clear Likely Term Selection Option Type Remoes the selection of the likely option. Click this action on the section bar. The form remoes the selection. The type of the option, such as an amendment, break option, and lease expiration. If the renewal type is selected, the following fields apply: Term (Renewal Term), Renewal Expiration Date Landlord Notice Date (Must Exercise By) Option # The number that identifies the option record, such as 0, 1, 2, and 3. Term (Renewal Term) Likely Term End Date (Likely Expiration Date) Status Likely Term The duration of the renewal. This field applies if the renewal type is selected in the Option Type field. The date when the term of the current likely option ends or expires. The status of the lease option record. The check box that indicates whether this lease option is the current likely option for the likely term. 74 Copyright IBM Corp. 2011, 2012

81 Likely term option section Use this section of the Lease Abstract form to identify the details of the selected likely term option. Name The name of the lease option record. The name is populated from the Option Type field. Option Type The type of the option, such as amendment, break option, and lease expiration. Option # The number that identifies the option record, such as 0, 1, 2, and 3. Likely Term End Date The date when the term of the likely option ends or expires. (Likely Expiration Date) FASB 13 treatment section Use this section of the Lease Abstract form to apply the FASB-specific standard by the Financial Accounting Standards Board (FASB). This standard calculates the treatment of "Capital" (capitalized) or "Operating" (non-capitalized) for the lease. Meanwhile, the joint standard by the FASB and International Accounting Standards Board (IASB) treats all leases as capitalized leases. FASB Lease Type Does Property Transfer Ownership at End of Lease Does Lease hae Bargain Purchase Option Does Lease begin in the last 25% of Building Life Is Cost or Fair Value Determinable Is Lessor Implicit Interest Known Incremental Borrowing Rate Lease Rate Used (Calculated) Est. Economic Life of Asset (Yrs) Estimated FMV of Building Land Percentage The type of the FASB lease, such as partial building, building and land, and land only. Depending on your selection, the form shows a different set of fields. Select from yes or no. If the alue is yes, then the lease treatment is "Capital". Select from yes or no. If the alue is yes, then the lease treatment is "Capital". Select from yes or no. Select from yes or no. Depending on your selection, the form shows a different set of fields. If the alue is no, then the lease treatment is "Operating". Select from yes or no. The percentage for the borrowing or discount rate. The calculated percentage for the lease rate. The estimated years for the economic life of the asset. The estimated fair market alue (FMV) of the building component only. The percentage of the lease that is represented by the land component. Chapter 4. Creating lease abstracts 75

82 Figure 6. Flow diagram for calculating the FASB treatment of a building-and-land lease 76 Copyright IBM Corp. 2011, 2012

83 Figure 7. Flow diagram for calculating the FASB treatment of a partial-building lease Chapter 4. Creating lease abstracts 77

84 Figure 8. Flow diagram for calculating the FASB treatment of a land-only lease 78 Copyright IBM Corp. 2011, 2012

85 Chapter 5. Creating leases Oeriew of lease creation To make updates and queries more efficient, you can digitally store lease data by creating lease records. You can create real estate lease records through manual data entry, or by approing and completing lease abstract records. Meanwhile, you can create asset lease records through manual data entry. When you input and store lease records, the records are presented as lease forms, and the forms are organized into different tabs. These forms include the Real Estate Lease form and Asset Lease form. The form tabs include the Clauses, Options, and Terms tab and the Accounting tab. Real estate lease records To digitally store lease data, you can input the contents into lease records. The real estate lease record can contain as much of the actual lease details as you want, based on the preferences and standards of your organization. Contract creation process flow Figure 9. Flow diagram for creating the real estate lease Real estate lease creation As a real estate contract manager, you can specify the entire lease contract and attach it as a file, or summarize key aspects of it. You can input real estate lease records into your IBM TRIRIGA application, or approe and complete a lease abstract record that is already in the application. Upon mutual agreement, the lease abstract record seres as a formal real estate lease record. After the lease abstract record is actiated, approed, and completed, Copyright IBM Corp. 2011,

86 it creates a real estate lease draft that is aailable for further transactions. As a result, the second record can separate security between outsourced and internal resources that are abstracting leases. The tabs, sections, and fields in a real estate lease record hae the same significance regardless of the method that is used to specify their data. Sae the real estate lease record after you specify the data and before you moe to the next tab. Asset lease records To digitally store lease data, you can input the contents into lease records. The asset lease record can contain as much of the actual lease details as you want, based on the preferences and standards of your organization. Contract creation process flow Figure 10. Flow diagram for creating the asset lease Asset lease creation As an asset lease contract manager, you can specify the entire lease contract and attach it as a file, or summarize key aspects of it. You can input asset lease records into your IBM TRIRIGA application. Sae the asset lease record after you specify the data and before you moe to the next tab. Accounting tab concepts Use this tab of the lease form to specify the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) information. This information includes the accounting details, borrowing rate, growth assumptions, rent component assumptions, and likely term option. This tab also calculates the FASB-specific treatment of "Capital" or "Operating" for the lease. The form shows this tab only if you hae access as a Lease Accounting Manager role with a Real Estate Manager license. 80 Copyright IBM Corp. 2011, 2012

87 For more information, see the Lease Accounting Manager subsection in the IBM TRIRIGA 10 Getting Started User Guide book. Likely terms Likely term is an important concept within the lease accounting standards of the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). According to these standards, payments must be amortized for the entire likely term of a lease. This likely term amortization calculates a more accurate financial impact analysis for the leases in a business portfolio. The likely term of the lease is a calculated duration from the start date to the end date of the likely term for the lease. The calculation is as follows: (End Date Start Date) = Likely Term (Duration) The Start Date is represented by the Commencement Date field. The End Date is represented by the Likely Term Expiration Date field. Likely options Based on contractual or non-contractual business reasons or unexpected economic conditions, you might be prompted to change the expected lease term. If that occurs, you can click the Reiew Assumptions action to identify the likely option, or the lease option that is most likely to be exercised. The identified option determines the new end date for the likely term. The list of options is filtered to show only actie selections, and only alid Option Type field selections are used to determine the likely term: renewal, termination, or purchase option. When you select the likely option to be exercised, the application sets a new Likely Term Expiration Date based on the following logic: If you select the purchase option, then the application extends the amortization to the Economic Life End as the Likely Term Expiration Date. If you select the renewal option, then the application extends the amortization to the Renewal Expiration Date as the Likely Term Expiration Date. If you select the termination option, then the application extends the amortization to the Likely Termination Execute Date as the Likely Term Expiration Date. If none of the options are likely to be exercised, then the application uses the base lease Expiration Date as the Likely Term Expiration Date. Assumptions Assumptions models are used in amortization schedule calculations to forecast the future best estimate of payment obligations for the likely term of the lease. Companies can use assumption models to determine the impact that leases hae on their financial balance sheets. The lease accounting standards by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) define specific fields and processes for assumptions. For instance, any change to any type of assumption must be recorded in a log or history record. If a financial audit occurs, such logs can be proided. This record is called the assumption audit log. Assumptions can be broken down into seeral main categories, all of which hae an impact on amortization schedules and financial line-item generation. Chapter 5. Creating leases 81

88 Incremental Borrowing Rate The borrowing or discount rate is used to determine the discount of future estimated lease payments. This discount rate is used in net present alue (NPV) along with straight-line rent per year to obtain the present alue of rent. Percent Growth Assumptions The percent growth assumptions hae rules to determine whether an assumption applies to the lease. When a growth assumption that is based on an index or fair market rental alue (FMRV) does not apply, the form hides the corresponding field. For the index growth assumption, you can use any cost or price index, including the following examples: The Consumer Price Index (CPI) measures the aerage change oer time in the prices paid by consumers for a market of consumer goods and serices. The Construction Cost Index (CCI) is a business cycle indicator that shows the trend in the costs incurred by the contractor in the construction process. The Producer Price Index (PPI) measures the aerage change oer time in the selling prices receied by producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some serices. Rent Component Assumptions The rent component assumptions deal with gross leases that combine lease components and serices components together in rental payments. Howeer, the FASB-IASB requires a cost breakdown of these payment components. This breakdown allows the lessee or tenant to exclude the serice-related components from the amortization schedule (in fiscal line items) and from financial or liability reports. Typically, for gross leases, the tenant pays a single amount that includes both the rent and operating expenses. Howeer, the tenant needs to amortize only the rental portion of the amount, based on the percentage breakdown that is proided by the landlord. The portion of the payments for serices is excluded from rent financial calculations. These assumptions apply if the Lease Category selection contains the term "gross", such as full serice gross or modified gross. If it is not a gross lease, the form hides the Rent Component Assumptions section. Amortization Amortization is the process of paying off a debt oer time through regularly scheduled payments. Lease payments are amortized for the likely term of the lease by using the straight-line method. The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) require the lessee to determine the present alue of the estimated likely lease payments. There are many methods used in depreciating assets or leases. Generally, companies use the straight-line method for book purposes or financial purposes. The FASB-IASB requires rental expenses to be recognized on a straight-line basis. This means that the same amount of expense must be recognized each month, regardless of the actual rent payment during the month. 82 Copyright IBM Corp. 2011, 2012

89 The Accounting tab can be used to amortize oer the shorter of (a) the lease term or (b) the economic life of the leased property. This amortization can be reflected in the profit and loss (P&L) as depreciation expense. This tab can also amortize the obligation to pay rent liability with the debt amortization method, and reflect that amortization in the P&L as interest expense. Any time the Lease Accountant submits an assumption for a single lease or multiple leases (for bulk processing), the application does two things: Sets the Amortization Recalc (Recalculation) Needed field to true. Triggers a background process to generate or recalculate the amortization schedule for each lease. There are seeral ways that an amortization can be triggered in the application. Click the Complete action on a lease abstract to create a real estate lease. If payment schedules are defined for the real estate lease, then the application generates an amortization schedule. Click the Actiate action on a real estate lease or asset lease to generate an amortization schedule. Click the Reiew Assumptions action to reiew the likely term and assumptions on a real estate lease or asset lease, and generate an amortization schedule. The lease can be in Draft, Reision In Progress, or Actie status. Fiscal line items Fiscal line items (FLIs) track the amortization schedule alues for each fiscal period. These FLIs are created or recalculated depending on your alues for direct costs, one-time payments, partial payments, option types, or other alues. The application applies the following business rules to create or recalculate FLIs: If a lease has an Initial Direct Costs alue in the Accounting tab, the alue is included in the FLI for the first fiscal period. Any one-time payments within the likely term are spread equally across all the fiscal periods for the likely term. Any partial first and partial last payments are included in the fiscal period to which they belong. The application looks for the Expected Date to be in the fiscal period. If the Lease Category contains the term "gross", the lease components and serices components are separated based on their alues from the Rent Component Assumptions section. If a likely term includes a likely option with an Option Type selection of purchase or termination, the following logic updates the FLI. If the selection is the purchase option, then spread the purchase price eenly across the life of the lease. The price is reflected under the Other Rent Obligations section on the FLI. If the selection is the termination option, then sum the projected payment plus the penalty, and spread that total eenly across the life of the lease. This total is reflected under the Other Rent Obligations section in the FLI. Finally, on accounts payable (AP) leases, sum the AP payments minus the accounts receiable (AR) payments. On AR leases, sum the AR payments minus the AP payments. Meanwhile, on the FLI, the liability alue, asset alue, and net equity always decrease to zero. Chapter 5. Creating leases 83

90 Straight line calculations The rent expense alues from multiple fiscal line items (FLIs) are summed to obtain the total rent expenses in the Accounting tab. This total alue is used to calculate the straight-line rent per year. Future estimated lease payments are discounted by the incremental borrowing rate of the lessee. This discount rate is applied to the net present alue (NPV), along with straight-line rent per year, to calculate the present alue of rent. Lease abstract to real estate lease process When the completed lease abstract generates a real estate lease, the Financial Accounting Standards Board (FASB) or International Accounting Standards Board (IASB) information might be absent. This information is optional and might not be aailable to the lease abstractor or lease administrator when the process begins. In these cases, the application proides the necessary default information. The following business rules apply to the likely term option: If a likely term option is selected on the lease abstract, then the application populates the Likely Term Expiration Date field based on that selection. If a likely term option is not selected on the lease abstract, then the application retriees the Lease Expiration Date alue to populate the Likely Term Expiration Date field. The following business rules apply to the assumption reiew information and the initial assumption audit log that is generated when the real estate lease is created: If the lease abstract has data in any assumption field, then the application maps this data to the lease. The application also creates an initial assumption audit log from this data with the Reiew Type field set to "Other". Meanwhile, the Reiew Comments field is set to "Assumption Audit Log was auto-created from data entered on the Lease Abstract". If the lease abstract does not hae data in any assumption field, then the application maps the data from the application settings to the lease. The application also creates an initial assumption audit log from this data with the Reiew Type field set to "Other". Meanwhile, the Reiew Comments field is set to "Assumption Audit Log was auto-created from Application Settings since assumption data was not proided on the Lease Abstract". You can access the application settings by selecting Tools > System Setup > General > Application Settings then clicking the Lease Accounting Settings tab. Creating real estate lease records To input lease data into lease records, you can manually create real estate lease records. Before you begin You must sign in as a Real Estate Contract Manager. Procedure 1. Select Contracts > Leases. 84 Copyright IBM Corp. 2011, 2012

91 2. In the Related Links Contract Leases portal section, select RE Contracts > Leases. 3. Click the Add action. 4. Specify the details. 5. Click the Contact Details tab. 6. Click the Contract Administrator role. 7. In the Contact section, click the Find action, select a name, click OK, and sae the role. 8. Create the draft. Form tabs The tabs at the top of the Real Estate Lease form represent the different areas of a real estate lease record. Depending on your security access to the form, such tabs might include general information, notifications, system details, and reports. Common form tabs indicate tabs that are shared across many types of forms. You might not hae access to some of these elements. The elements to which you hae access depend on your job function and role within your company and how the application was implemented at your company. General tab Use this tab of the Real Estate Lease form to specify the lease identifier, lease names, critical dates, primary address, and other details for the lease. General section: Use this section of the Real Estate Lease form to identify the lease identifier, lease name, legal name, and other general information for the record. ID The unique identifier of the real estate lease record. If you do not proide an identifier, one is automatically generated. Reision The number of times that the lease was reised, such as 0, 1, 2, and 3. You can modify an actie record by clicking the Reise action. Status The status of the real estate lease record. Picture Name Legal Name Display Color Legacy ID The image that represents the real estate lease. Click the Upload Picture icon to select the image, such as the photograph of the property. The name of the real estate lease. The brief description of the real estate lease. The name of the real estate lease as specified in the legal documents. The color that is assigned to this record when this record is shown in query results. Click the Search icon and select the color. The identifier that is related to this record from a preious system or application. Units section: Chapter 5. Creating leases 85

92 Use this section of the Real Estate Lease form to identify the currency and unit of measure for area, carbon, and energy from the lease. Currency Area Units Carbon Reporting UOM Energy Reporting UOM The type of currency for all cost-related fields in the record. The form shows the default currency that is set by your administrator. The unit of measure (UOM) for all area-related fields in the record. The unit of measure (UOM) for all carbon-related fields in the record. The unit of measure (UOM) for all energy-related fields in the record. Details section: Use this section of the Real Estate Lease form to identify the lease type, lease category, and other lease details. Lease Type Lease Category Primary Use Base Lease Rate Lease Base Year Co-location The type of the lease, in terms of expense, income, and sublease. Click the Search icon and select from the listed choices. There are 4 classifications: Expense lease: This option is the most common. Use it when you lease space from a landlord. Expense lease - master sublease: An expense lease that is used when you are subleasing space from another party. Income lease sublease: An income-based or accounts receiable (AR) lease that is used when you hae an expense lease and you are subleasing part of it to another tenant. Income lease third-party lease: An income-based or accounts receiable (AR) lease that is used when you own the property and hae subtenants for the tenants in the building. If the alue is an income lease (sublease or third-party lease), the form shows the Parent Real Estate Contract of Sublease section in the General tab. The category of the lease, in terms of net and gross. Click the Search icon and select from the listed choices. The main use of the property, such as administration, education, manufacturing, and warehouse. Click the Search icon and select from the listed choices. If you select the retail option, the form shows the Grand Open Date field and Soft Open Date field in the Critical Dates section. The rate of the base lease. This base is the minimum lease amount. The unit of currency is set in the Units section. The base year of the lease. This base is the initial lease period. Select the check box if multiple internal organizations use the property. 86 Copyright IBM Corp. 2011, 2012

93 Conersion Group Currency Exchange Date Contract Status Memorandum of Lease Rules and Regulation Is Cost or Fair Market Value Determinable Is it Market-Based Accounting Type The currency-exchange group that is applied to all cost-related fields in the record. The date of the currency exchange. This date was automatically generated when the record was first opened by the Add action. To change the alue, click the Calendar icon and select the date. The status of the physical lease contract. Click the Search icon and select from the listed choices. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. Select the check box if the situation applies. The type of the accounting method, such as accounts payable (AP) and accounts receiable (AR). Parent real estate contract of sublease section: Use this section of the Real Estate Lease form to identify the parent real estate lease for this sublease. Find Remoe Name ID Lists the aailable information. Click this action on the section bar and select from the listed real estate leases. Click OK. Deletes a line item. Select the line item and click this action. The name of the parent real estate lease record. Specify a few characters to take adantage of autocomplete. The unique identifier of the parent real estate lease record. Critical dates section: Use this section of the Real Estate Lease form to identify the commencement, construction, expiration, and other dates from the lease. The form uses these dates to populate other fields in other sections and tabs in the real estate lease. If you hae auditable or percentage rent clauses, you must specify the Commencement Date field and Base Lease Expiration Date field to calculate the amount due for the occupied duration. Commencement Date Lease Term Base Lease Expiration Date The date when the lease term and the contracted work on the site begins. Click the Calendar icon and select the date. The term that begins with the Commencement Date and ends with the Base Lease Expiration Date. The date when the base lease expires, without renewal options applied. Click the Calendar icon and select the date. Chapter 5. Creating leases 87

94 Expiration Reminder Expiration Notification Date Rent Commencement Date Occupancy Date Vacate Date Inception (Execution) Date Abstracted Date Legal Notice Date Legal Notice Reminder Legal Notification Date Original Expiration Date Construction Start Date Construction End Date Soft Open Date Grand Open Date The duration before which you want adance notification of the lease expiration date. Click the Calendar icon and specify the duration. The date when the expiration reminder is sent. This date is calculated from the Base Lease Expiration Date and the Expiration Reminder duration. The date when the obligation to pay rent begins. Click the Calendar icon and select the date. The date when the tenant begins occupying the site. Click the Calendar icon and select the date. The date when the tenant acates the site. Click the Calendar icon and select the date. The date when the lease becomes legally enforced and the legal commitment to the agreement begins. Click the Calendar icon and select the date. The date when the lease is abstracted. Click the Calendar icon and select the date. The date when the lease becomes legally alid. Click the Calendar icon and select the date. The duration before which you want adance notification of the legal notice date. Click the Calendar icon and specify the duration. The date when the legal notice reminder is sent. This date is calculated from the Legal Notice Date and the Legal Notice Reminder duration. The date when the original base lease expires, without renewal options or other changes applied. Click the Calendar icon and select the date. The date when actual construction on the site begins. Click the Calendar icon and select the date. The date when construction on the site ends. Click the Calendar icon and select the date. The date when the retail site begins to operate with minimal public promotion. If you selected the retail option for the Primary Use field in the Details section, the form shows this field. Click the Calendar icon and select the date. The date when the retail site makes the public announcement of its official opening. If you selected the retail option for the Primary Use field in the Details section, the form shows this field. Click the Calendar icon and select the date. Cost summary section: Use this section of the Real Estate Lease form to identify the annual costs of operations, fixed assets, and estimated spending for the lease. 88 Copyright IBM Corp. 2011, 2012

95 Annual Cost of Operations Annual Spend (Estimated) Annual Fixed Assets Costs The cost per year of the operations for the lease. The estimated spending per year for the lease. The read-only alue is obtained from other sections in the record. The cost per year of the fixed assets for the lease. Enironmental details section: Use this section of the Real Estate Lease form to identify the annual totals of energy usage and carbon emissions for the lease. Annual Energy Use Annual Total CO2e The total per year of energy usage for the lease. The unit of measure is obtained from the Units section. The total per year of carbon emissions for the lease. The unit of measure is obtained from the Units section. Primary location section: Use this section of the Real Estate Lease form to identify the primary location at the primary address from the lease. Find Clear Hierarchy Path Lists the aailable information. Click this action on the section bar and select an existing location from the location hierarchy. Erases the information. Click this action. The primary location at the primary address. This field shows the same path as the Hierarchy Path field in the Locations tab. Location cost code section: Use this section of the Real Estate Lease form to identify the accounting cost classification of the lease location. Find Clear ID Name Lists the aailable information. Click this action on the section bar and select from the listed cost codes. Click OK. Erases the information. Click this action. The unique identifier of the cost code. Specify a few characters to take adantage of autocomplete. The name of the cost code. Primary address section: Use this section of the Real Estate Lease form to identify the address information from the lease. Chapter 5. Creating leases 89

96 Address Zip/Postal Code Geography Path City State/Proince Country The street address on the lease. The postal code on the lease. The geographic location on the lease, including the full path in the geographic hierarchy. Specify a few characters to take adantage of autocomplete or click the Search icon to find the location. The city on the lease. This field is automatically populated based on the selected geographic path. The state or proince on the lease. This field is automatically populated based on the selected geographic path. The country on the lease. This field is automatically populated based on the selected geographic path. Other dates section: Use this section of the Real Estate Lease form to identify any significant dates that are not coered elsewhere in the record. Add Linked Record Remoe Date Type Date Adds a date. Click this action on the section bar. The form adds a line in the section. Opens a line item. Click the Linked Record icon. Deletes a line item. Select the line item and click this action. The type of lease date. Click the Search icon from the listed choices. The specific calendar date. Click the Calendar icon select the date. Specify a description for the date. and select and Lease notifications section: Use this section of the Real Estate Lease form to identify the notifications that are sent, their types, and the roles that are notified. When you actiate the lease, the notifications for the lease expiration, legal notice, option dates, and option reminders are automatically scheduled and generated. You can also manually create other notifications. Add Remoe Notification Deadline Name Notification Type Adds a notification. Click this action on the section bar. Specify the details and click Create. The form adds a line in the section. Deletes a line item. Select the line item and click this action. The date when the notification is sent. The date of the target eent for which the notification is sent. The name of the target eent for which the notification is sent. The type of the notification, such as a lease expiration, legal notice, and other types that you can manually create. 90 Copyright IBM Corp. 2011, 2012

97 Notify Role Status The role that receies the notification, such as a Business Representatie, Contract Administrator, and Portfolio Manager. The status of the lease notification record. Clauses, options, and terms tab Use this tab of the Real Estate Lease form to specify the clauses, options, and terms that are related to the lease. After you create the lease draft, all of the section actions on this tab are enabled. You can also use the Option wizard form to add more lease options. Clauses section: Use this section of the Real Estate Lease form to identify the clauses that are related to the lease. Add Find Template Remoe Section Category Clause Type Granted in Lease Section Page Clause Summary Adds a clause. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Adds a clause that is based on a predefined clause template. Click this action on the section bar. Select the template and click OK. The form adds a line in the section. Open the line item to edit the details. Deletes a line item. Select the line item and click this action. The category of the lease clause, such as allowance, insurance, rights, and use restrictions. The type of the lease clause within the clause category, such as abatement, earthquake, occupancy, and signage. The legal status of this clause. The section where the clause details are found in the legal document. The page where the clause details are found in the legal document. The summary of the clause text from the legal document. Options section: Use this section of the Real Estate Lease form to identify the options that are related to the lease. Add Options Wizard Remoe Adds one option at a time. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. Adds seeral options at one time. Click this action. Specify the details and click the Create Option action. The wizard form remains open for you to specify and create another option. When you close the wizard form, the lease form adds the lines in the section. Deletes a line item. Select the line item and click this action. Chapter 5. Creating leases 91

98 Option Type The type of the option, such as an amendment, break option, and lease expiration. If the renewal type is selected, the following fields apply: Term (Renewal Term), Renewal Expiration Date Landlord Notice Date (Must Exercise By) Option # The number that identifies the option record, such as 0, 1, 2, and 3. Term (Renewal Term) Option Effectie Date Renewal Expiration Date Landlord Notice Date (Must Exercise By) Exercise Notice Date Option Text Status The duration of the renewal. This field applies if the renewal type is selected in the Option Type field. The date when the option takes effect. The date when the renewal expires. This date is calculated from the Option Effectie Date and the Term (Renewal Term) duration. This field applies if the renewal type is selected in the Option Type field. The date by which the option must be exercised. This field applies if the renewal type is selected in the Option Type field. The date when your exercise notification is sent. The text that describes the option. The status of the lease option record. Terms section: Use this section of the Real Estate Lease form to identify the terms and term reisions that are related to the lease. Add Reision Reision Number Analysis Date Reision Status Adds a reision of the terms. Click this action on the section bar. Specify the details and click the Create action. The form adds a line in the section. The number of times that the lease terms were reised, such as 0, 1, 2, and 3. The date of the reision or reision analysis. The brief description of the reision or reision analysis. The status of the lease terms record. Accounting tab Use this tab of the Real Estate Lease form to specify the accounting details, borrowing rate, growth assumptions, rent component assumptions, and likely term option. This tab also calculates the Financial Accounting Standards Board (FASB) treatment of "Capital" or "Operating" for the lease. The form shows this tab only if you hae access as a Lease Accountant or Lease Accounting Manager role with a Real Estate Manager license. For more information, see the Lease Accounting Manager subsection in the IBM TRIRIGA 10 Getting Started User Guide book. Accounting details section: 92 Copyright IBM Corp. 2011, 2012

99 Use this section of the Real Estate Lease form to identify the accounting type, accounting dates, initial costs, and other details for lease accounting. Accounting Type Spend Category Accounting Start Date Accounting Cost Center Accounting End Date Create Straight Line Adjustments Operating Portion of Capital Lease Straight Line Capital Portion of Rent Initial Direct Costs 10k Disclosure The type of the accounting method, such as accounts payable (AP) and accounts receiable (AR). The acquisition or disposition category for this lease. Click the Search icon and select from the listed choices. The date when accounting begins. The form populates this date from the Commencement Date field. To change the date, click the Calendar icon and select the date. The responsible cost center for this lease. The date when accounting ends. The form populates this date from the Expiration Date field. To change the date, click the Calendar icon and select the date. Select the check box if the situation applies. The straight-line calculation takes the accounting start and end dates to determine the duration. These dates are populated from the lease commencement and expiration dates of the specific lease. You can change these dates to include renewal periods or extensions. This calculation also includes free rent (or rent abatement) periods. If there are payments within any day in a month of the accounting dates on the lease, the straight-line calculation uses the full month. Straight-line adjustments are made to payment line items as accrual amounts. The percentage for the operating portion. When the lease treatment is "Operating", this field is not used in the straight-line rent-liability calculation. The interal for the straight-line calculations, such as annually, monthly, quarterly, and semi-annually. The direct costs at the start of the lease. The unit of currency is taken from the General tab. If a alue is specified, the alue is included in the fiscal line item (FLI) for the first fiscal period. The disclosure of financial performance and accounting practices as required by the US Securities and Exchange Commission (SEC) in the Form 10-K report. Financial assumption reiews section: Use this section of the Real Estate Lease form to identify the preious and next assumptions reiew dates for the lease. Last Reiew Date Reiew Period Next Reiew Date The date of the preious assumptions reiew, if one occurred. The duration between assumptions reiews. Click the Calendar icon and specify the duration. The date of the next assumptions reiew. This date is calculated from the Last Reiew Date and the Reiew Period duration. Chapter 5. Creating leases 93

100 Last Reiew By The name of the Lease Accountant or Lease Administrator who processed the preious assumptions reiew, if one occurred. Likely term assumption section: Use this section of the Real Estate Lease form to identify the length of the likely term. If the likely term is considered "short term", you can choose to include or exclude the lease from the amortization schedule. Commencement Date The date when the lease term and the contracted work on the site begins. This date is populated from the same field on the General tab. Short Term Lease The alue that indicates whether the likely term is less than 12 months long, or more than 12 months long. If the alue is yes, then the likely term is less than 12 months long, and considered "short term". According to the Financial Accounting Standards Board (FASB), a short-term lease is not necessarily considered a financial liability. The form shows the Include in Amortization Schedule check box to gie you the option to include or exclude the lease from the amortization schedule. If the alue is no, then the likely term is more than 12 months long. Likely Expiration Date (Likely Term End Date) Include in Amortization Schedule Likely Term Extend Rent Payments for Likely Term The date when the term of the current likely option ends or expires. The alue of this read-only field is determined by the reiew assumptions process. Select the check box if the situation applies. The form shows this field if the likely term is less than 12 months long, and considered "short term". According to the FASB, a short-term lease is not necessarily considered a financial liability. The form shows this check box to gie you the option to include or exclude the lease from the amortization schedule. The duration of the likely term. This duration is calculated from the Commencement Date and the Likely Expiration Date. Select the check box if the situation applies. If the check box is selected, then the rental payments are extended with fiscal line items (FLIs). Here are a couple of examples of extended payments: The fiscal end date occurs later than the likely term end date: In this case, the payments are extended on the FLIs after the last scheduled payment until the fiscal end date. The payment schedule ends before the likely term end date. In this case, the payments are extended on the FLIs after the last scheduled payment until the likely term end date. The form shows the default alue that is set by your administrator in the application settings record. Borrow rate and % growth assumptions section: 94 Copyright IBM Corp. 2011, 2012

101 Use this section of the Real Estate Lease form to identify the borrowing rate and growth rates for the lease. The fiscal line items (FLIs) are adjusted by these rates to determine the best estimate of payment obligations for the likely term of the lease. Incremental Borrowing Rate Index Growth % FMRV Growth % The percentage for the borrowing or discount rate. The projected payments on the FLIs are adjusted by this rate. The percentage for the index growth rate. The form shows this field if the lease contains an index-based clause. If the clause has a payment schedule, the projected payments on the FLIs are adjusted by this rate. The percentage for the fair market rental alue (FMRV) growth rate. The form shows this field if the lease contains an FMRV-based clause. If the clause has a payment schedule, the projected payments on the FLIs are adjusted by this rate. Rent component assumptions section: Use this section of the Real Estate Lease form to identify the maintenance, tax, base-rent, and other portions of the lease payment. The form shows this section if the Lease Category selection contains the term "gross", such as full serice gross or modified gross. % Is Maintenance The percentage for the maintenance portion of the lease payment. %IsTax The percentage for the tax portion of the lease payment. % Is Other The percentage for other (non-rental) costs in the lease payment. % Is Base Rent The form calculates the percentage for the base-rent portion of the lease payment, as 100% minus the three preious percentages. Likely term option section: Use this section of the Real Estate Lease form to identify the likely term end date, and other details of the current likely term option. Name The name of the lease option record. The name is populated from the Option Type field. Option Type The type of the option, such as an amendment, break option, and lease expiration. Option # The number that identifies the option record, such as 0, 1, 2, and 3. Likely Term End Date (Likely Expiration Date) The date when the term of the current likely option ends or expires. The alue of this read-only field is determined by the reiew assumptions process. Amortization summary section: Chapter 5. Creating leases 95

102 Use this section of the Real Estate Lease form to identify the fiscal periods, operating expenses, and other amortization details for the lease. The read-only details are summarized from the fiscal line items (FLIs) in the amortization schedule. Number of Periods Number of Years Straight Line Rent Per Year Total Rent Present Value Total Rent Expenses Total Maintenance Expenses Total Tax Expenses Total Insurance Expenses Total Security Expenses Total Utilities Expenses Total Other Expenses Total Incentie Expenses Periods Per Year Fiscal Start Fiscal End The number of periods between the Fiscal Start date and the Fiscal End date. The number of years between the Fiscal Start date and the Fiscal End date. The rental payment per year that is calculated by the straight-line method. The present alue of the estimated future rental payments for the likely term of the lease. The amount of rental expenses that is summed from the FLIs for the likely term of the lease. The amount of maintenance and repair expenses that is summed from the FLIs for the likely term of the lease. The amount of property taxes that is summed from the FLIs for the likely term of the lease. The amount of property insurance that is summed from the FLIs for the likely term of the lease. The amount of security expenses that is summed from the FLIs for the likely term of the lease. The amount of utility expenses that is summed from the FLIs for the likely term of the lease. The amount of other recurring expenses that is summed from the FLIs for the likely term of the lease. The amount of lease incenties that is summed from the FLIs for the likely term of the lease. The number of fiscal periods per year. The form shows the default number that is set by your administrator in the application settings record. The date when the first fiscal period begins. For many cases, the Fiscal Start date is the same as the Commencement Date. But in some cases, when the accounting starts earlier than the lease commencement, the Fiscal Start date is the same as the Accounting Start Date. The date when the last fiscal period ends. For many cases, the Fiscal End date is the same as the Likely Expiration Date. But in some cases, when the accounting ends later than the lease expiration, the Fiscal End date is the same as the Accounting End Date. Amortization schedule section: Use this section of the Real Estate Lease form to identify the fiscal line items (FLIs) in the amortization schedule for the lease. The straight-line FLI payments are adjusted by any assumptions to determine the best estimate of payment 96 Copyright IBM Corp. 2011, 2012

103 obligations for the likely term of the lease. Each FLI record contains its fiscal period, rental payment, principal, interest, equity, and other amortization details. Period # Fiscal Period Rent Expense Net Rent Payment Interest Expense Principal Amortization Asset Value Net Equity P&L Impact (P&L Book Expense) The number that identifies the FLI record, such as 1, 2, 3, and 4. The number of FLIs in the amortization schedule is determined by the Number of Periods field. The period within the year that identifies the FLI record, such as and The amount of rental expenses for the specific fiscal period. The net payment of rent for the specific fiscal period. The amount of interest expenses for the specific fiscal period. The amount of principal expenses for the specific fiscal period. The straight-line amount for the specific fiscal period. This amount is constant for all FLIs in the amortization schedule. The alue of the asset for the specific fiscal period. The net equity of the asset for the specific fiscal period. This alue is calculated from the Asset Value amount and the Liability Value amount in the FLI record. The amount of profit-and-loss (P&L) expense for the specific fiscal period. This expense is calculated from the Interest Expense amount and the Amortization amount in the FLI record. Impact report section: Use this section of the Real Estate Lease form to identify the impact of the joint accounting standard. This joint standard by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) treats all leases as capitalized leases. Meanwhile, the FASB-specific standard calculates the treatment of "Capital" (capitalized) or "Operating" (non-capitalized) for the lease. X Axis Y Axis P&L (Book Expense) Rent Straight-Line Expense The fiscal period, such as fiscal month, fiscal quarter, and fiscal year. The rental expenses or profit-and-loss (P&L) expenses. In the joint standard, the amount of profit-and-loss (P&L) expense for the specific fiscal period. This expense is calculated from the Interest Expense amount and the Amortization amount in the fiscal line item (FLI) record. In the FASB-specific standard, the straight-line amount of rental expenses for the specific fiscal period. This amount is constant for all FLIs in the amortization schedule. FASB 13 treatment section: Use this section of the Real Estate Lease form to apply the FASB-specific standard by the Financial Accounting Standards Board (FASB). This standard calculates the treatment of "Capital" (capitalized) or "Operating" (non-capitalized) for the lease. Meanwhile, the joint standard by the FASB and International Accounting Standards Board (IASB) treats all leases as capitalized leases. Chapter 5. Creating leases 97

104 Calculate Lease Treatment FASB Lease Type Lease Treatment Does Property Transfer Ownership at End of Lease Does Lease hae Bargain Purchase Option Does Lease begin in the last 25% of Building Life Is Cost or Fair Value Determinable Is Lessor Implicit Interest Known Incremental Borrowing Rate Is Lease Term 75% >= Asset's Economic Life Lease Rate Used (Calculated) Is NPV of Rent >= 90% of Asset's FMV Est. Economic Life of Asset (Yrs) Total Rent Fair Market Value Rent Obligation as % of FMV Land Percentage PV of Rent Fair Value of Building PV of Rent / Building Only (Discounted) Fair Value of Land Land Portion of Rent Calculates the lease treatment of "Capital" (capitalized) or "Operating" (non-capitalized) for the lease. Click this action on the section bar. The form shows the treatment in the Lease Treatment field. The type of FASB lease, such as partial building, building and land, and land only. Depending on your selection, the form shows a different set of fields. The calculated treatment of "Capital" (capitalized) or "Operating" (non-capitalized) for the lease. Select from yes or no. If the alue is yes, then the lease treatment is "Capital". Select from yes or no. If the alue is yes, then the lease treatment is "Capital". Select from yes or no. Select from yes or no. Depending on your selection, the form shows a different set of fields. If the alue is no, then the lease treatment is "Operating". Select from yes or no. The percentage for the borrowing or discount rate. The alue of yes or no. If the lease term is at least 75% of the economic life of the asset, then the lease treatment is "Capital". The calculated percentage for the lease rate. The alue of yes or no. If the net present alue (NPV) of rent is 90% of the fair market alue (FMV) of the asset, then the lease treatment is "Capital". The estimated years for the economic life of the asset. The amount of the rental expenses for the length of the lease. The estimated fair market alue (FMV) for the building. The percentage of the fair market alue (FMV) of the asset that is represented by the rental expenses. The percentage of the lease that is represented by the land component. The present alue (PV) of the rental expenses for the length of the lease. The fair market alue (FMV) of the building component only. The present alue (PV) of the rental expenses for the building component only. The fair alue (FV) or fair market alue (FMV) of the land component only. The amount of rental expenses for the length of the lease for the land component only. 98 Copyright IBM Corp. 2011, 2012

105 Land's Value > 25% of FV of Property Lease Term (in Years) The alue of yes or no. If the alue of the land component is greater than 25% of the fair alue (FV) of the property, then the alue is yes. The length of the lease in years. Chapter 5. Creating leases 99

106 Figure 11. Flow diagram for calculating the FASB treatment of a building-and-land lease 100 Copyright IBM Corp. 2011, 2012

107 Figure 12. Flow diagram for calculating the FASB treatment of a partial-building lease Chapter 5. Creating leases 101

108 Figure 13. Flow diagram for calculating the FASB treatment of a land-only lease Assumption audit log section: Use this section of the Real Estate Lease form to identify the assumption audit logs that were created through the reiew assumptions process. Each read-only log record contains its reiew date, reiew type, and reiew comments. Assumptions Reiew Date Reiew Type Reiew Comments Status The date of the assumptions reiew. The type of the assumptions reiew, such as business factors, contractual factors, non-contractual factors, and other factors. The comments for the assumptions reiew. The status of the assumption audit log record. Balance sheet effect section: Use this section of the Real Estate Lease form to identify the net equity of the asset for the likely term of the lease. X Axis Y Axis Net Equity The fiscal period, such as fiscal month, fiscal quarter, and fiscal year. The net equity of the asset. The net equity of the asset for the specific fiscal period. This alue is calculated from the Asset Value amount and the Liability Value amount in the fiscal line item (FLI) record. 102 Copyright IBM Corp. 2011, 2012