13.1 Adjust index or rate

This is a change that you would register yearly for a contract with index regulation, since IFRS 16 requires you to change the lease liability if there’s a change in future lease payments caused by a change of an index or rate.

Click Adjust index or rate to make the adjustment to the CPI and discount rate . This function can be open to all, so that CPI adjustment or change of discount rate can be made by all users.

Fill in the date for the lease change and edit the lease payment or discount rate (If it’s an adjustment to discount rate, set the Type of lease adjustment to Interest) from that day and set the date for the next index adjustment.

Start with the date of the change. This is used to identify the month of the change. If a change takes effect in January, the change date needs to be in January. Please note that we use full months, so the change will have a month depreciation and interest in the month of the change. In case a change happens in the end of a month and the preference is to account for the change from February, please use February 1st as the date of the change. We recommend setting a date in the Date of next lease adjustment field to get a reminder for the next adjustment on the front page.

Click Save and update the calculation file with the changes by clicking update leases.

You will find the change (Here, January 1st 2021) as shown below, and the depreciations will change accordingly.

If the change in the cash flow is after the date that the net present value effect of the change is recorded (Change date), you can use the Date of minimum lease payments change under General to set the date when the change in the cash flow happens. This is to ensure that changes registered to the lease payments will take effect at this date instead of at the change date itself. For example, if you set the change date to January 2021, but the Date of minimum lease payments change is set to April 2021, the net present value effect of change is recorded in January 2021, while the change to the fixed payment cash flow happens in April 2021.

We recommend using the reminder function to set the date for the next index regulation to get an overview on the front page:

You can click on the relevant contract in the overview and then click Adjust index or rate or Log other change (Submenu to Log change) to make an adjustment to the CPI or discount rate.