Leasehold Improvements

020.FFM.L2.02 Leasehold Improvements
End-to-End Business Process: 020 Acquire-to-Dispose
Business Scenario(s) Covered
  • Leasehold Improvement
Business Actor(s)
Property Management Office; Finance Office; Private Entity Lessor (PEL)
Synopsis
A property owned by a PEL has been leased by a government agency for a five-year term. After occupying the property, leasehold improvements are made and paid for by the agency. The leasehold improvements are determined to have a useful life of ten years, but are amortized based on the remaining lease period (4 years). The lease is ended as agreed at the end of the lease period, and the leasehold improvements revert to the PEL.
Assumptions and Dependencies
  1. There may or may not be automated (near/real-time or batch) interfaces between functional areas/functions/activities or between provider solutions/systems.
  2. There is no presumption as to which activities are executed by which actor, or which activities are automated, semi-automated, or manual.
  3. Supporting information for general ledger transactions includes sub-ledger entries when sub-ledgers are used.
  4. Appropriate attributes (e.g., object class and project) are included as part of the accounting string.
  5. Relationships between use cases are described in the Framework for Federal Financial Management Use Cases found in the related overview document.
  6. All predecessor activities required to trigger the Initiating Event have been completed.
  7. Funds availability checks are performed against appropriations/fund accounts for obligating funds, and against obligations for disbursing funds in accordance with OMB A-11, Section 150.2.
  8. The lease contract required to lease the property has been executed under previous Request-to-Procure and Procure-to-Pay processes.
  9. Monthly disbursements related to the lease are made under the separate Procure-to-Pay process.
  10. A property record has already been established for the leased property.
  11. The leasehold improvements to be made have been identified, and the vendor has been selected through a previous Request-to-Procure process.
  12. An order or award has been issued for the leasehold improvements in a previous Request-to-Procure process.
  13. The leasehold improvements exceed the capitalization threshold and are completed by the end of the first year of the lease.
  14. The vendor performing leasehold improvements has been properly registered in government systems, the relevant payee information has been set up in the FM system, and the invoice is submitted electronically.
  15. Tolerance percentages or amounts between obligation and commitment amounts and between expenditure and obligation amounts have been established.
FFMSR ID Reference(s) 1.1.2; 1.1.3; 2.1.1; 2.1.2; 2.2.1; 2.2.2
Initiating Event

Improvements to the leased property have been completed.

020.FFM.L2.02 LEASEHOLD IMPROVEMENTS
Typical Flow of Events
FFM Event Non-FFM Event Input(s) Output(s) / Outcome(s)
1
  1. Receive vendor invoice information for leasehold improvements in an OMB-approved electronic invoicing solution (ACQ.040.020 Documentation of Delivery/Acceptance)
  2. Provide notification of vendor invoice submission for review and acceptance of vendor invoice (ACQ.040.020 Documentation of Delivery/Acceptance)
  3. Validate that leasehold improvements have been completed in accordance with contract (PRM.020.020 Property Space Design and Construction Management)
  4. Request processing of receipt and acceptance of leasehold improvements (ACQ.040.020 Documentation of Delivery/Acceptance)
  5. Request processing and matching of accepted vendor invoice (Program Management Activity)
  • Leasehold improvement documentation
  • Final vendor invoice for leasehold improvements
  • Receiving report, if used
  • Approved order or award for leasehold improvements
  • Notification of vendor invoice submission
  • Accepted vendor invoice for leasehold improvements
  • Receiving report, if used
  • Acceptance report
  • Request for processing and matching of accepted vendor invoice
2

Receive and process request for processing and matching of accepted vendor invoice and perform a three-way match (FFM.030.070 Payment Processing - Commercial Payments)
  • Accepted vendor invoice for leasehold improvements
  • Receiving report, if used
  • Acceptance report
  • Request for processing and matching of accepted vendor invoice
  • Successful three-way match
  • Appropriate payable entry created with reference to source information
  • Validated vendor invoice for leasehold improvements
3

Request funds availability check (ACQ.040.020 Documentation of Delivery/Acceptance)
  • Validated vendor invoice for leasehold improvements
  • Request for funds availability check
4

Receive and process request for funds availability check (FFM.010.020 Fund Allocation and Control)
  • Request for funds availability check
  • Funds availability response
5
  1. Approve vendor invoice for leasehold improvements
  2. Request for processing of approved vendor invoice (ACQ.040.020 Documentation of Delivery/Acceptance)
  • Funds availability response
  • Validated vendor invoice for leasehold improvements
  • Approved vendor invoice for leasehold improvements
  • Request for processing of approved vendor invoice
6
  1. Receive and process approved vendor invoice (FFM.030.070 Payment Processing - Commercial Payments)
  2. Confirm difference between expenditure amount and obligation amount does not exceed tolerance percentage/amount (FFM.030.020 Obligation Management)
  3. Establish payable (FFM.030.070 Payment Processing – Commercial Payments)
  4. Liquidate obligation (FFM.030.020 Obligation Management)
  • Approved vendor invoice
  • Request for processing of approved vendor invoice
  • Appropriate payable entry created with reference to source information
  • Appropriate obligation liquidation entry created with reference to source information
  • Appropriate accrual reversal entry created with reference to source information
7

Request disbursement (ACQ.040.020 Documentation of Delivery/Acceptance)
  • Approved vendor invoice
  • Request for disbursement
8
  1. Receive and process disbursement request (FFM.030.070 Payment Processing - Commercial Payments)
  2. Initiate disbursement (FFM.030.070 Payment Processing - Commercial Payments)
  3. Generate disbursement schedule (FFM.030.110 Payment Disbursement
  4. Certify payment of disbursement schedule (FFM.030.110 Payment Disbursement)
  5. Receive confirmation of disbursement (FFM.030.120 Payment Confirmation)
  • Request for disbursement
  • Appropriate payable entry liquidated with reference to source information
  • Appropriate obligation liquidation entry created with reference to source information
  • Appropriate disbursement-in -transit entry created with reference to source information
  • Certified disbursement schedule
  • Disbursement confirmation information
  • Appropriate disbursement-in -transit entry liquidated with reference to source information
  • Appropriate disbursement entry created with reference to source information
  • Vendor receives payment
9

Post appropriate budgetary, proprietary, and/or memorandum entries to the general ledger (GL) (FFM.090.020 General Ledger Posting)
  • GL entries
  • Appropriate GL accounts updated
10
  1. Determine the beneficial occupancy date (PRM.010.070 Property Acquisition and Control Reporting)
  2. Determine useful life and value of leasehold improvements (PRM.010.050 Property Valuation)
  3. Determine amortization schedule of leasehold improvements (PRM.010.050 Property Valuation)
  4. Update property record to reflect improvements (PRM.010.060 Property Control and Accountability)
  5. Request update of asset information and amortization schedule for leasehold improvements (PRM.010.070 Property Acquisition and Control Reporting)
  • Approved order or award for leasehold improvements
  • Vendor invoice for improvements
  • Current property record
  • Useful life of leasehold improvements
  • Beneficial Occupancy Date
  • Asset value information for leasehold improvements
  • Amortization schedule for leasehold improvements
  • Updated property record
  • Request to update asset information and amortization schedule for leasehold improvements
11

Receive and process request to update asset information and amortization schedule for leasehold improvements (FFM.020.010 Financial Asset Information Processing - Property, Plant, and Equipment)
  • Request to update asset information and amortization schedule for leasehold improvements
  • Updated property record
  • Appropriate property asset information entries created with reference to source information
  • Appropriate asset amortization entries created with reference to source information
12

Post appropriate budgetary, proprietary, and/or memorandum entries to the general ledger (GL) (FFM.090.020 General Ledger Posting)
  • GL entries
  • Appropriate GL accounts updated
13

Process annual amortization of leasehold improvements (FFM.020.010 Financial Asset Information Processing - Property, Plant, and Equipment)
  • Amortization schedule for leasehold improvements
  • Appropriate asset amortization entries created with reference to source information
14

Post appropriate budgetary, proprietary, and/or memorandum entries to the general ledger (GL) (FFM.090.020 General Ledger Posting)
  • GL entries
  • Appropriate GL accounts updated
15
  1. Document decision not to renew lease and to retire property (PRM.010.040 Property Transfer, Disposal, or Retirement)
  2. Validate that leasehold improvements have been completely amortized (PRM.010.050 Property Valuation)
  3. Update property record to reflect end of lease and retiring of leasehold improvements (PRM.010.060 Property Control and Accountability)
  4. Request update of asset information to reflect retirement, including completed amortization (PRM.010.070 Property Acquisition and Control Reporting)
  • Lease agreement
  • Asset information for leasehold improvements
  • Amortization schedule for leasehold improvements
  • Current property record
  • Documentation not to renew lease
  • Asset retirement information for leasehold improvements
  • Accrued amortization for leasehold improvements
  • Updated property record
  • Request to update asset information to reflect retirement and zero amortization value
16

Receive and process request to update asset information to reflect retirement and zero remaining amortization for leasehold improvements (FFM.020.010 Financial Asset Information Processing - Property, Plant, and Equipment)
  • Request to update asset information to reflect retirement and zero amortization value
  • Appropriate property asset entries updated with reference to source information
  • Appropriate amortization entry created with reference to source information
17

Post appropriate budgetary, proprietary, and/or memorandum entries to the general ledger (GL) (FFM.090.020 General Ledger Posting)
  • GL entries
  • Appropriate GL accounts updated

This page was last updated on November 17, 2022.