Effective Dates in Nomos One are key to your IFRS 16 Financial Reporting. This article describes how Effective Dates work so you can make the right decision when entering these dates in your portfolio.
What are Effective Dates?
The Effective Date of a payment or change to your Agreement is the date that any Remeasurement to the Lease Liability and/or Right of Use Asset will be recorded in your Financial Reports.
Effective Date fields can be found in the following places in Nomos One:
- IFRS 16 Component Payments; and
- The IFRS Settings Change Questionnaire
Please Note: Depending on the type of Remeasurement recorded, the Description in the Journal Report may vary. For example, if an Extension or Decrease to the lease term or a change in the Number of Renewals has been recorded, the Description in the Journal Report will show either an Increase in Lease Term or a Decrease in Lease Term.
Effective Dates in IFRS 16 Component Payments
All IFRS 16 Component Payments have an Effective Date field. In the Journal Report, this date is the date where you'll see the Remeasurement of the Lease Liability and/or Right of Use Asset. This is different to the Payment Date, which is when you'll see the Payment Journal lines in the Journal Report.
For example, if I enter a Rent Holiday or Discount with an Effective Date of 31 October 2023, in the Journal Report, I see the following Remeasurement Journal line dated 31 October 2023.
The other Journal lines that are impacted by this payment are the Rent Payment lines within the Rent Holiday period.
Another example is if I enter a One-Off Payment with an Effective Date of 1 December 2023, and a Payment Date of 15 December 2023. In my Journal Report, I will see a Remeasurement Journal on accounted for on the Effective Date. However, we won't see the Journal payment lines until the Payment Date.
Effective Dates in the IFRS Settings Change Questionnaire
To ensure that any Remeasurements from the IFRS Settings Change Questionnaire occur on the correct date in your Reporting, most questions in the questionnaire ask you to enter an Effective Date. This is the date that you'll see the Remeasurement of the Lease Liability and/or Right of Use Asset due to the changes in IFRS 16 judgements entered.
For example, if I wanted to change the anticipated number of Renewals, I'm asked to enter an Effective Date. In the Journal Report, I see a Remeasurement of the Lease Liability and Right of Use Asset (Increase in Lease Term) on the 1st of November 2023, as per the Effective Date.
Please Note: For any questions that don't have an Effective Date field, the Remeasurement of the Lease Liability and/or Right of Use Asset will show in the Journal Report on the same date as the Event where the Questionnaire has been completed.
Nomos One does not provide or purport to provide any accounting, financial, tax, legal or any professional advice, nor does Nomos One purport to offer a financial product or service. Nomos One is not responsible or liable for any claim, loss, damage, costs or expenses resulting from your use of or reliance on these resource materials. It is your responsibility to obtain accounting, financial, legal and taxation advice to ensure your use of the Nomos One system meets your individual requirements.