NetLease - Non-Lease Payment Modification
Use Case: The non-lease payment modification is used when changes should be made to the non-lease components of future payments. In these instances, you do NOT remeasure the lease liability or the ROU Asset.
Prerequisites: Non-Lease Payments must be configured in your NetLease environment as a purchased addon feature. Additionally, lease modifications must be entered in NetLease within the month and prior to month-end amortization and reclass entries. Additionally, because a lease modification cannot be undone without effort, before running a lease modification, it is best practice to review the lease entries and confirm the changes you intend to make to the payment schedule.
Effective Date: Note that the effective date is the date when both parties agree to the lease modifications. Therefore, the month in which the agreement is obtained is most likely the date that it should be recorded within NetLease.
Step By Step Process:
- Navigate to the lease record where the modification is to be recorded and select the Modify Lease button by going to NetLease > Lease Management > Lease List and then select view on the lease that is being modified
- After selecting Modify, you will land on the Lease Modification page where you can select the Modification Type of Non-Lease Payment
- Note that the fields are prepopulated with the current lease attributes, including the payment schedule
- Update the following as necessary for the lease modification (refer to the guidance for appropriate adjustments per your modification type
| Field | Description | Example |
| Effective Modification Date | Effective Modification Date | 2/1/2022 |
| Modification Note | Provide a brief description of the basis and adjustments made with the modification for subsequent support and reference | Change in CAM Amount for year 2022 |
| Adjusted Non-Lease Payment Schedule | Update the payment schedule for any changes to the expected lease payments causing the modification | 200 |
- After double-checking updates and inputs for the modification and remeasurement, click Modify Lease
- You will be navigated back to the lease record and you can refresh and monitor the Processing Modification… notification until the modification is complete and you can see the modification on the Modification Subtab
- A historical record of the modification will be saved to the Modifications subtab of the NetLease Lease record with details from before and after the modification
- Clicking the Edit link will reveal the lease information both before and after the modification