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Lease equalization reserve

Hi All,

There is a typical telecom requirement as given below:

The telecom operator rents a space (building terrace for ex) & puts a tower (site), with their own equipments, other third parties also put up their Base transceiver Stations (BTS) also on the same tower, in return the telecom operator charges the following:

- Fixed Amount (rent)

- Variable amount (power, electricity, depreciation for passive structure etc..)

During the period, if number of sharer (third parties putting up their BTS) increase, the billing value changes (predefined formula) for both fixed & variable rentals (Service tax / VAT / Service tax applicable).

For Rental objects, we needs to account of lease equalization reserve, for this we need automation of accounting.

Now the rentals are pre defined during the start of the contract, in this case how the change in rentals in between the periods of contracts can be handled?

Is there any functionality where such multiple variations during the contract period can be handled?

Regards,

VDS

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2 Answers

  • avatar image
    Former Member
    Nov 02, 2013 at 06:23 AM

    Hi Vikas,

    Right now I'm in a project for Tower Industries with REFX SAP module.

    In my current scenario, we are facing the issue, how to calculate equalized future earning for rent & cash flow. This is for lease-in & lease-out contracts in REFX.

    Can you please guide me.

    Thanks in Advance.

    And Happy Diwali.

    Raj

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    • Former Member Former Member

      Hi Siddharth,

      1) Contract Lease-In with LandLord

      2) Contract is for 10 years

      3) Basic Rent is Rs.10,000/-

      4) Escalation is (3rd year 5%, 5th years 12%, 8th year 17%)

         

         Escalation will be on basic amount ie Rs.10,000/-

      1st Year 10,000 2nd Year 10,000 3rd Year 10,500 4th Year 10,500 5th Year 12,600 6th Year 12,600 7th Year 12,600 8th Year 13,700 9th Year 13,700 10th Year 13,700 Total 119,900

      What my query is:

      a) Can we have rent equalization for the period of 10 year...ie Rs.11,990/- per in REFX.

      b) Can we have no-liner escalation model as above.

      Your input would be great help.

      Thanks,

      Raj

  • avatar image
    Former Member
    Nov 08, 2013 at 11:51 AM

    Hi Vikas,

    You can go for Sales Based Settlement for your issue. you need to create two Sales based Condition i.e. Fixed Rent and Variable Rent. Then you need to create to Sales and Reporting Rule. For Sales Rule you need to configure Sales Type and Sales Rule type with unit as NO (Number). In the Contract master create Sales rule for respective condition with Sales Grading Type as "Sales Grading Agreement" and there you can maintain Q.Sales from, Q.Sales To, Amount that will be multiplied by the quantity exceeding the desired levels and minimum rent that needs to be charged.

    Then You can enter Sales Report for the particular period month wise and then Amount gets distributed automatically according to the Sales Reports entered.

    Screen shot of Sales Grading is also attached for your reference.

    Hope it could help you!

    Feel free to contact for further clarifications.

    Regards,

    Siddharth Khandelwal


    scnissue123.jpg (219.9 kB)
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