How to register planned adjustments

Planned adjustments can be e.g. index adjustments, adjustments according to a certain interest table, a fixed amount and more. The description below focuses on index adjustments and adjustments based on interest tables as those are the most common types of adjustment.

Tip!
Find a description of all fields here.

You can register planned index adjustments defined in the contract if Consumer Price Index is activated in your solution. In this case, the price index will adjust automatically based on the consumer price development.

Example:
We assume that the contract was entered into on 1 January 2020, with the next adjustment the following year, i.e. on 1 January 2021 (“Start date”). The contract should be adjusted yearly. The contract states that it follows the Consumer Price Index.

  1. Go to Contracts, select the related contract in the list and click Edit.

  2. Scroll down to the payment schedule you want to adjust. Click Edit.

  3. Only IFRS 16 contracts: Check that Variable payment linked to rate or index is selected under IFRS 16 lease classification.

  4. Click Create adjustment schedule.

  5. Select Index adjustment under Adjustment type. (Read more about other types of adjustment below.)

  6. Select the Start date for the adjustment. In this example January 1st, 2021. This is the first time the payments shall be adjusted according to the index regulations.

  7. Select a YearlyInterval. For other situations, other intervals can be used.

  8. In case of a contractual stop date for the index regulation, you could enter this under Until.

  9. Under Index, select the index you want to use. In this example, the Consumer Price Index.
    Tip! You can find and activate more indexes under System settings - Price indexes. See System settings for price indexes.

  10. Under Index base period, select the reference month and year for the first lease payment. The contract often states something like "latest available index". For contracts starting in January, this would typically be the November index of the year before.
    Tip! Check that a number is displayed under Index base amount. This ensure that there are values available for the month you entered.

  11. If the same rule shall apply for future regulations, select 2 month before under Use index from.

  12. Enter other relevant fields. See also Adjustment schedule.

  13. Click OK.

The payment schedule adjusts according to the values you have entered. You can check this in the list over Obligations. The adjustment itself is listed at the bottom of the payment schedule under Adjustments. In case a reassessment is necessary based on this change, the system will notify you about this when saving the payment schedule. Find a step-by-step description for this under How to handle reassessment and modifications.

This description refers to additional functionality that must be activated explicitly in Complete Control Backoffice. Your single point of contact at House of Control AS can help you with this.

To adjust interest rates, for example when Nibor changes, interest tables can be used. The tables are set up manually under System settings - Interest tables, and any margins are added at contract level.

  1. Go to Contracts, select the related contract in the list and click Edit.

  2. Scroll down to the payment schedule you want to adjust. Click Edit.

  3. Only IFRS 16 contracts: Check that Variable payment linked to rate or index is selected under IFRS 16 lease classification.

  4. Click Create adjustment schedule.

  5. Select Interest table as Adjustment type.
    Tip! The Interval that determines the date the payment is adjusted after the start date. The adjustment then takes place automatically, based on the figures that have been manually entered into the interest table. If using a monthly interval, the lease payments will be adjusted each month, provided that you enter new interest rates each month in the interest table. If you wish to make these adjustments twice a year, in Interval select Custom and then Every 6 months. Remember to enter the correct interest rates in the table.

  6. Select the Interest table.

  7. If the contract states an adjustment based on the intererest table (e.g. 3% on LIBOR), you can enter this under Margin /Initial rate.

  8. Click OK.

The adjustment is added and you can check it in the Obligations / Receivables list in the Adjustments column. A line for the adjustment has been added to the payment schedule (scroll down to the Adjustment section). To change the entered adjustment, you would need to click Edit in this line.

Here's a list with other adjustment types.

  • Select the start date for the adjustment.

  • Select “Once”. This replaces the old amount from the adjustment date above. The history is retained.

  • To be used when the lease amount increases, for instance.

  • It is also possible to enter an end date for this adjustment.

  • Select the start date for the adjustment.

  • Interval: determines the date the payment is adjusted after the start date. You can choose

  • whether the increase should take place once, weekly, monthly, yearly or at a custom interval.

  • The old amount + the increase = the new amount. The history is retained.

  • It is also possible to enter an end date for this adjustment.

  • Select the start date for the adjustment.

  • You can choose whether the reduction should take place once, weekly, monthly, yearly or at a custom interval.

  • The old amount - the reduction = the new amount. The history is retained.

  • It is also possible to enter an end date for this adjustment.

  • Select the start date for the adjustment.

  • Interval: How often should the amount be multiplied? For example: if the lease amount increases by 2 per cent per annum, select a yearly interval and enter 1.02 in

  • “Value”. The history is retained.

  • It is also possible to enter an end date for this adjustment.