NetLessor - Non-Lease Payment Modification
Overview
A non-lease payment modification is used when changes need to be made to the non-lease components of future payments. In these instances, you do not need to adjust amortization schedules or remeasure balance sheet amounts. Instead, you only need to adjust the amounts of the non-lease payment streams.
Prerequisites
Non-Lease Payments must be enabled in your NetLessor setup. It is important to note that lease modifications must be entered in NetLessor before processing month-end entries. To avoid the need to undo an incorrect lease modification, it is best practice to review the lease and confirm the changes you intend to make to the payment schedule before executing a lease modification.
Note that the effective date is typically when both parties agree to the lease modifications. Therefore, the month in which the agreement is reached is typically the date it should be recorded in NetLessor.
Step By Step Process
- Navigate to the lease record where the modification is to be recorded.
- Once on the lease record, click the Modify button:
- On the Lease Modification page, select the Modification Type of Non-Lease Payment:
Note that the information on this screen is prepopulated with the lease's current attributes—including the payment schedule. When the Non-Lease Payment modification type is selected, the system will gray out all fields except those related to non-lease payments.
- Update the following information as needed for the lease modification:
| Field | Description | Example |
| Effective Modification Date | The start date of the period in which the modification will generate | 1/1/2025 |
| Modification Note | Text box used to record any relevant notes with regards to the modification | Change in Non-Lease Payment amount for year 2025 |
| Adjusted Non-Lease Payment Schedule | Update the payment schedule to reflect any changes to the expected non-lease payments | 200 |
- After double-checking your updates and inputs for the modification, click the Modify Lease button:
- You will be navigated back to the lease record. Refresh and monitor until you get confirmation that the modification is complete.
- A historical record of the modification will be saved in the Modifications subtab of the lease record. Clicking the ID hyperlink will take you to the modification record, where you can view the lease information both before and after the modification.