CPI-linked rent
Lease payments that increase in line with the Consumer Prices Index.
Definition
CPI-linked rent is a form of index-linked rent where the lease payments are adjusted periodically based on changes in the Consumer Prices Index. Under IFRS 16 and amended FRS 102, the lease liability is initially measured using the index at the commencement date. When payments are subsequently adjusted for a change in CPI, the lease liability must be remeasured to reflect the revised payments.
Why it matters
CPI-linked rents are increasingly common in UK commercial property leases and can trigger remeasurement obligations as the index changes over time.
In AuditLease
AuditLease can track rent escalation terms and will support rent review alerts to help users identify when remeasurement may be needed.
Related terms
Put this into practice with AuditLease
AuditLease handles IFRS 16 and FRS 102 lease calculations, statutory note generation, journal entries, and audit evidence, so your team spends less time on spreadsheets and more time on judgements.
This definition is for general information only and is not accounting or legal advice. Definitions are based on IFRS 16, FRS 102, and associated guidance published by the IFRS Foundation and the Financial Reporting Council. Users should refer to the applicable accounting standards and their professional advisers for judgement-specific matters.