If you need to record an Incentive against your Agreement after commencement, you can do this through a Variation Event. In this article, we will walk you through the steps of how to do so. If you'd like some more information on how we treat Incentives in Nomos One, check out this support article on Understanding Incentives.
How to Add an Incentive to your Agreement
To add an Incentive to your Agreement:
- On the relevant Agreement, click “Action” > “Create / Edit Events”.
- This will take you to the Events page of the Agreement Wizard, where you can scroll to the Variation section and click “Edit”.
- Using the calendar tool or text field, enter a Variation Event for the date you agreed to the terms of the Incentive. Remember to click “Add”.
Please note: You should not edit any of the Agreement data or information while inside the Agreement Wizard. Any changes made here will alter the data known at the Commencement of your Agreement, and will result in a change to your Opening Balances.
- Click “Done” to return to the Agreement Timeline.
- You'll now see a new icon on the Agreement Timeline representing the Variation Event. At Step 1, click “Start Event”.
Please note: While you can add Events on a date that is within a locked period, you cannot complete these Events on the Agreement Event Timeline. If your Variation Event is within a locked period, you'll need to ask a user in your Organisation with the Administrator permission to edit the Lock Date before you can complete the Event. Check out this article for more information.
- At Step 2, select "Yes; there are variations to the agreement", then click “+ Add variation”.
- Ensure that you are in the Variation Wizard. You can do this by checking the Header says Event > Variation. Once confirmed, navigate to the Rent & Payment page.
- Scroll down to the Incentives section and click “Add a new incentive”.
- Add the details of the Incentive, including:
- A Description of the Incentive payment.
- The Effective Date of the payment (the date of any remeasurement in the Journal report).
- The Payment Date of the Incentive.
- The Amount.
- The Taxation treatment for the payment.
- Click “Add” to save your Incentive against your Agreement.
Please note: The Effective Date of the Incentive must be before the Payment Date, otherwise, you'll be unable to save the payment line.
- Click “Done” to return to the Agreement Timeline.
- On the Timeline, click “Next” at step 2 of the Variation Event.
Please note: Adding an IFRS 16 Component Payment such as an Incentive won't produce a Display Note summarising the change made in the Variation Event. You may like to add your own Custom Event Note to record details of the Incentive that was added through the Variation Event.
- Upload any supporting Documentation, or select No Documentation and click “Next”.
- Click “Complete”. You will see a certification nothing that the Event has been completed, and the event icon will turn green.
Validating your Incentive was Added Correctly
If you use Nomos One for IFRS 16 Reporting, you can validate your Incentive was added correctly using the Journal Report. To do this, run the report over the Effective Date of the Incentive, and you should see “Remeasurement of Lease Liability” journal lines. If you run the report over the Payment Date of the Incentive, you should see journal lines for the payment itself.
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.