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What Is the Date Effective?
What Is the Date Effective?

The effective date is when the modified lease terms have been agreed upon.

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Written by Support
Updated over a week ago

When you input a modification, you will see a field where you're required to input the date effective:

What is the purpose of the date effective field?

This is the date the lease terms have changed.

For example, let's say on February 1st, it is agreed that the lease payments will increase on April 1st. From February 1st, the lessee now has a greater future obligation, and the lease liability and right-of-use asset need to be remeasured on this date. So the Date Effective is February 1st, and the start date would be April 1st.

Tip: It's unlikely that the effective date and start date will be the same date. Why? If there's a payment change, the lessor will likely give notice rather than expect the lessee to start making a higher payment without any notice or negotiation.

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