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 IFRS 16 reports.
Effective Date fields can be found in the following places in Nomos One:
- IFRS 16 Component Payments
- 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 change in the Number of Renewals has been recorded, the Description in the Journal Report will show either “Increase in Lease Term” or “Decrease in Lease Term”.
Additionally, note that the resulting remeasurement of Lease Liability and/or Right of Use Asset will be present in each IFRS 16 report, not just the Journal Report. We are using the Journal Report in this article as it is the best way to view both the remeasurement and effective date information.
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. These dates can be seen in the “Event Date” column of the Journal report.
For example, for a Rent Holiday or Discount with an Effective Date of 31 October 2023, as per the first screenshot, in the second screenshot of the Journal Report, we see remeasurement journal lines, dated 31 October 2023:
The other Journal lines that are impacted by this payment are the “Rent Payment” lines for rent payment dates within the Rent Holiday period.
For another example, a One-Off Payment with an Effective Date of 4 January 2024, and a Payment Date of 15 January 2024. In the Journal Report, we see a remeasurement journal on the Effective Date. However, we won't see the payment journal 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 recorded change/s to IFRS 16 judgements.
For example, the process for changing the anticipated number of Renewals involves recording an Effective Date. In the Journal Report, we see a remeasurement of the Lease Liability and Right of Use Asset (the "Increase in Lease Term" lines) on the 1st of November 2023, as per the recorded 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 Settings Change Questionnaire has been completed. For example, if a change to the IFRS 16 judgments was recorded on a Fixed Rent Review scheduled for 1 January 2025, the resulting remeasurement would take effect from 1 January 2025.
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