CPI Index Page - Recurring Expenses - Contract Module
CPI indexes can be loaded at the firm-level or at the contract-level. The CPI Index page allows users to specify CPI indexes at a contract-level. Load an index at the firm level if there is a particular index that is commonly used for a lot of your CPI-indexed leases. Lucernex has a short list of common indexes that will be loaded and maintained for every firm automatically for you to use as well. Load an index at the contract level if the index applies to one or a small number of CPI-indexed leases.
See the CPI Indexes in Lucernex page for a list of Frequently Asked Questions about CPI Indexes in Lucernex.
You can only add one CPI index per contract. This CPI index will be titled Contract Specific.
To navigate to the CPI Index page:
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Navigate to Contract > Payment Info > Recurring Expenses.
Use the links in the Navigation Pane on the leftmost side of the page.
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Select CPI Index from the field to the left of the Actions menu on the right side of the page.
The CPI Index page opens.
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Follow a procedure below.
When a CPI adjustment is made, two values are pulled from the associated CPI table:
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The base CPI index, which is from the month and year of the expense setup if there has been no ASC 842 re-measurement done; or from the month and year of the ASC 842 re-measurement if that's been done.
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The current CPI index, which is from the month and year of the retro date of the CPI adjustment being made
Then the ratio of the two values is calculated. The CPI increase is calculated from this ratio, based on the base rent as of the retro date and the ratio calculated in the previous step.
This CPI increase will never be below 0, even if the current CPI index is lower than the base CPI index. This way, the total CPI-indexed rent will never be lower than the fixed base rent. However, as the CPI index fluctuates up or down, the amount of the CPI expense above base rent may either increase or decrease.
If there are catch-up payments due, they will be calculated by taking the difference between the new and previous CPI-increase schedule amounts.
To add a CPI Index to your contract, follow the steps above:
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Click Add Item.
This displays in the Actions menu on the right side of the page.
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Select the year of the CPI index from the Year field.
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Enter the two-digit month in the Month field.
For example, enter February as 02.
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Enter the CPI index value in the CPI Value field.
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Enter the publication date of the CPI index in the Published Date field.
Select Calendar 
to open the date picker.
It is our best practice recommendation that you include the publication date of the CPI index. In rare cases, the government may make changes to CPI index values for a prior month or year. However, as an auditing practice, we take the policy of retaining the old CPI index value in the system. By including the publication date of the CPI index, the system will know which CPI value to use—the more recent one—if there are multiple records in the system for a particular month or year.
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Click Save Changes.
This displays in the Actions menu on the right side of the page.
The page refreshes. A new CPI Index record appears in the CPI Index List.
To edit a CPI Index:
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Select the CPI Index record you want to edit from the CPI Index List.
The CPI Index data populates on the page.
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Make your changes.
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Click Save Changes.
This displays in the Actions menu on the right side of the page.
The page refreshes. Your changes are saved.
To delete a CPI Index record:
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Select the CPI Index record you want to delete from the CPI Index List.
The CPI Index data populates on the page.
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Click Delete Item.
This displays in the Actions menu on the right side of the page.
A dialog opens, asking you to confirm your choice.
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Click Yes.
The dialog box closes. The CPI Index record is deleted.
How Lucernex Calculates CPI-Indexed Rent