About Indexation

Nakisa Real Estate allows you to apply indexation to your lease and non-lease terms according to the Consumer Price Index (CPI). The rate is calculated by dividing the new index rate defined in the indexation plan by the base rate that is defined when creating a lease, and is applied to the term amount.

When executing an indexation plan with conditional indexation, the increase between the Current Index Level set in the indexation plan and the latest Applicable Current Index Level should fall in the range of the Minimum Percentage Change and Maximum Percentage Change fields. If the increase is above or below these values, the adjusted value appears in the Applicable Current Index Level of the indexation plan.

When the Indexation Date occurs between payments, and payments are in arrears with any amount frequency other than "One Time", the new rate is applied on the portion of the amount from the Indexation Date to the following payment date. The new rate is then applied to the next whole payment amount. When payments are in advance or the amount frequency is "One Time", the new rate is applied on the next whole payment amount.

You can create a CPI Indexation plan in your lease, and execute multiple indexation plans at once using the CPI Mass Indexation module.

To properly index your terms, the following workflow must be followed:

  1. When creating your lease, set the indexation type for your lease or non-lease terms to CPI Local or CPI Global, and select whether conditional indexation is applied.
  2. Create your terms in the Rent Table tab where you will indicate whether the terms will have CPI applied.
  3. Activate your lease.
  4. In the Rent Table tab, create a CPI Indexation plan where you will define the currency and modification date. You will also select whether this indexation plan applies to lease and/or non-lease terms.
  5. Once your indexation plan has been created, it can be executed as early as the defined modification date. You can execute an indexation plan individually or index multiple leases at once through mass indexation.

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