Revision (Modification)

When making financial changes to a lease, you're required to save your changes by using one of two methods: Revise or Replace. It may be unclear when to use Revise and when to use Replace when you're changing a lease, so we've provided some additional information, best steps, and an example scenario below.

Revise

Revise is intended for when you've already booked a lease in a prior period, and then you make a change. You don't want to restate the lease from inception, because that would mess up your prior period balances.

Revise makes all changes to the lease happen as of the revision booking date entered (even if the changes reflect alterations to prior activity, like last month's rent), keeping the prior information to be used whenever reports are run for prior dates.

When you revise [modify] a lease, in most cases it needs to be retested for finance vs. operating, both from the lease inception date and separately as of the revision date. Therefore, you're required to enter an incremental borrowing rate, implicit rate (calculated automatically by EZLease if applicable), unguaranteed residual (if known), economic life, and fair value to enable testing. The Revision Booking Date is the date as of which the revision should be entered onto the books.

Optionally, you can enter revision notes before saving your changes. For example, you may want to leave a comment detailing essential information and rationale for making the revision. Revision notes appear on the Additional Data tab of a lease record and in the Audit Trail report.

Replace

Replace, on the other hand, restates the lease so that it looks as if the newly entered information was always what was shown for the lease, or back to the previous revision booking date (if the lease has revisions). It should be used if you haven't booked the lease yet (or if you've made a revision already in this period, but make a further change, as noted above).

Note: This action cannot be undone. If you choose "Replace" when updating financial information, there is no way to revert the changes.

As a general rule, if you have multiple changes during a single month (or other fiscal period), it's best to make them all part of a single revision. So, when you make the first revision, choose Revise; when you make additional changes in that month (before you book the revision), choose Replace, which adds those changes to the month's revision. All changes for the month will be booked at once.

Note: Revise/Replace only applies to changed financial information; descriptive information is always simply updated as if it were always there. 

If descriptive information is used to book a lease to a particular division or the like, and you want to move the lease from one division to another, you'll want to do a transfer termination of the old lease, then a transfer addition of the identical lease information, setting the new division.

Example scenario

So, for instance, you first enter a lease on January 13...

1. On January 15, you decide to adjust it. Use Replace.
2. On January 31, you run January reports, and book those entries in your GL.
3. On February 7, you need to make another change. Use Revise (because you've already booked the lease through January).
4. On February 11, you make another change. Since you haven't booked the Feb. 7 changes, you choose Replace (this will update revision "1" from Feb. 7, not revision "0" entered in January).
5. On February 28, you run February reports, and post those entries to your GL. If you make further changes, you would again choose Revise.

Revision values & notes

If notes were entered during a revision, you can view them on the Additional Data tab, in the Revision section at the bottom. Additionally, revision notes are shown on the Audit Trail report. 

EZLease automatically determines the Date of First Change which is the date as of which the first change in terms takes effect. This set of fields is not available when first entering a new lease.