Index-linked rent
Lease payments that rise in line with a published index such as CPI or RPI.
Definition
Where lease payments increase in line with an index (such as CPI, RPI, or a property index), the payments are variable lease payments linked to an index. At commencement, the current index is used. When the index is updated, the lease liability must be remeasured to reflect the new payment amounts.
Why it matters
Index-linked leases require periodic remeasurement when the index is updated. This triggers an adjustment to the lease liability and ROU asset.
In AuditLease
AuditLease supports index-linked payment escalation and flags leases for remeasurement when an index change is recorded.
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.