Rent review
A contractual mechanism allowing the rent to be reviewed and potentially reset at a specified date.
Definition
Rent review clauses in commercial property leases allow the rent to be reviewed — typically upwards only — at set intervals, often every three or five years. Where the new rent is determined by negotiation or open market value, it is a variable payment based on a non-index factor and is not included in the initial lease liability. It is recognised when the new amount becomes fixed.
Why it matters
Understanding whether a rent review produces an index-linked payment or a negotiated open-market payment affects whether it is included in the lease liability at inception. Open-market rent reviews are only recognised when the new rent is agreed.
In AuditLease
AuditLease plans to add structured rent review date fields in Phase R, helping users track upcoming rent review events and remeasurement triggers.
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.