A CPI increase by a lessor happens after the initial recognition of the right of use asset and a lease liability. This is because, at the commencement of the lease, both the lessor and lessee do not know what the CPI rate will be at the date of the lease payment increase.

If you're transitioning to the new lease accounting standard, you would include the current CPI amount in the fixed payment amount.

Cradle reflects this logic in the software, to input a CPI increase, you must select the Modifications tab at the agreement level, then + Add New Modification, and then select CPI.