Contract options fields
Field
Description
General
Contract
Enter the contract to which the contract option applies.
Contract line
The Contract line field is used to determine the linked functional currency to be used in calculations.
Contracting party - fine
Enter the contracting party that is required to pay a fine.
Contracting party - fee
Enter the contracting party that receives a fee.
Reasonably certain?
This field is automatically set by Planon. If the Reasonably certain? field is set to Yes, the option is included in the recalculation. Contract managers need to know which options are highly certain to be applied. In the element list with contract options, reasonably certain options are clearly recognizable because they have a different icon: Paper icon with plus
Note  
*If you do not see the icon, widen the Status column until the icon becomes visible.
*Screen capture showing part of the elements list with the paper icon
Switch to 'reasonably certain'?
Select Yes to set the option to 'reasonably certain' or No to set the option to 'not reasonably certain'.
Note  
*This setting is not always applicable, for example not for IFRS 16 operating leases.
Renewal options
Note:
When using renewal options in contracts based on lease accounting, the following applies:
automatic renewal is not supported;
you must use priority on renewal options;
there can be only one renewal option active at the same time;
it is not allowed to link a renewal option to a contract if the related contract line is not activated.
Indexation method
Select the indexation method that you want to apply when creating a renewal option for GASB lease contract. Only Percentage based indexation method is allowed. For more information renewal option in GASB, see GASB > Index method on renewal options. For information on defining the indexation methods, see Supporting data > Indexation methods.
Renewal option type
This is a read-only field that is associated with the Switch to 'reasonably certain'? field. If the Switch to 'reasonably certain'? field is set to Yes, Planon will automatically set the Renewal option type field to Additional term in case no fine amount has been registered on the option (in the Amount of fine field). If the Switch to 'reasonably certain'? field is set to No, Planon will automatically set the Renewal option type field to Additional fine in case a fine amount has been registered on the option in the Amount of fine field (only applies to operating leases).
Amount of fine
Enter the amount that has to be paid if the renewal option is not applied (only applies to operating leases).
Priority
The renewal process operates based on the value you set in this field. The contract option with the highest priority (1) is processed first. Contract options for the same contract cannot have the same priority.
Renewal term
Enter the period by which the contract can be extended. For lease accounting, the Renewal term field cannot be empty.
New amount at renewal
Use this field to specify a new amount for the renewal period. If the renewal option is applied, the related lease accounting contract line is updated with the new amount. For reasonably certain options these amounts are directly included in the lease accounting calculations.
Offset amount at renewal
The amount you specify here is added to the amount that is specified in contract line's the Amount field.
Note  
After applying a planned renewal option with an amount change, you have to perform a re-measurement of the relevant contract.
The New amount at renewal and Offset amount at renewal fields can only be changed if the renewal option is in the Inactive status.
You can only fill out either the New amount at renewal field or the Offset amount at renewal field.
Notice term - offering party /
Notice term - accepting party
In some cases, the notice term is related to the remaining open contract term. If the contract term changes due to a contract renewal, the notice term needs to be adjusted as well. Select the term of notice required by the accepting / offering party when renewing a contract.
When applying a renewal option, the value specified in these two fields is also updated in the corresponding fields of the linked contract.
Tentative notice date
The date in this field is automatically calculated and updated by Planon. Notice dates can be used in notifications, so that a contract manager can take timely action on a contract or contract option before the notice date expires. For more information, see the Notice dates on contract options section in the Contracts documentation.
Tentative contract end date
The date that appears in this field is based on the following calculation:
Contract end date + Renewal term = Tentative contract end date
Example:
31-12-2018 + Year = 31-12-2019
This date is a tentative date, because it may shift as a result of changing the contract end date. This date will only be calculated if the renewal option status is Active or In preparation.
Termination options / Purchase options
Exercisable by
Specify the contracting party that can exercise the termination / purchase option (Both, Accepting party, Offering party).
IMPORTANT: If Exercisable by is set to Both, you must manually set the termination option to 'reasonably certain' to ensure that the option is taken into account for the calculations. Be aware that as long as the option is 'not reasonably certain', it will not be taken into account in the calculations.
Term of notice - offering party
Specify the term of notice required by the offering party. The relevant unit of time (e.g. weeks, months, etc) is chosen from a pick list, together with the desired quantity of the selected unit.
Execution amount
Specify the amount that must be paid for the transaction to purchase the leased asset.
Purchase option?
Displays if the option is a purchase option. For more information on purchase options, see Using purchase options.