> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tangoanalytics.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Handle CPI adjustments

> Set up CPI/indexed rent and apply adjustments to recurring costs.

CPI (Consumer Price Index) adjustments update recurring costs based on an index value. Tango supports two setup methods and can integrate with a rent index source for US leases.

## CPI setup: Option 1 — Inclusive of recurring expense

In this option, the indexed rent calculation is built directly into the recurring expense record.

<Steps>
  <Step title="Navigate to the recurring cost">
    Go to **Lease Details → Recurring Costs** and select the cost you want to index (for example, Base Rent).
  </Step>

  <Step title="Open the CPI/Indexed Rent tab">
    Click the **CPI/Indexed Rent** tab on the right side of the page.
  </Step>

  <Step title="Configure the index">
    * **Index** — select the index to use (for example, CPI – All Urban Consumers – South)
    * **Previous Index Value** — the base index for the adjustment
    * **Current Index Value** — the new index value
    * **Next Adjustment Date** and **Index As Of Date**
    * **Floor Increase %** and **Ceiling Increase %** — if caps apply
    * **Frequency** — how often the adjustment occurs (for example, Annually)
    * **Index Multiplier** — applied against the calculated adjustment
    * **Payment Types to Include** — additional payment types to include in the calculation
  </Step>

  <Step title="Save">
    Click **Save**.
  </Step>
</Steps>

## CPI setup: Option 2 — Separate from recurring expense

In this option, a separate CPI-Variable recurring cost record holds the indexed component, keeping the fixed and variable amounts distinct.

<Steps>
  <Step title="Create the fixed rent line">
    In **Lease Details → Recurring Costs**, click **New** and add the base rent for the full term with the fixed period amount.
  </Step>

  <Step title="Create the variable CPI line">
    Click **New** again. Set the **Payment Type** to **CPI - Variable** (or **CPI – Schedule** if the variable component must be included in straight-line accounting). Set the **Period Amount** to \$0.00 and the **Adjustment Method** to **CPI/Indexed**.
  </Step>

  <Step title="Configure the index on the CPI line">
    With the CPI - Variable record selected, open the **CPI/Indexed Rent** tab and fill in the same index fields as Option 1. In **Payment Types to Include**, select the fixed rent line so the adjustment calculates against it.
  </Step>

  <Step title="Save">
    Click **Save**.
  </Step>
</Steps>

## Apply a CPI adjustment

<Steps>
  <Step title="Enter the current index value">
    Navigate to the recurring cost, open the **CPI/Indexed Rent** tab, fill in the **Current Index Value** and date if empty, then click **Save**.
  </Step>

  <Step title="Calculate the adjustment">
    Click **Calculate Adjustment**. The pop-up shows four sections:

    1. Current recurring cost schedule and latest processed payments
    2. Index information used for the calculation
    3. New recurring cost details (new amount, start date)
    4. Retroactive payment section — shown only if the change is effective before the last processed payment
  </Step>

  <Step title="Review and confirm">
    Review the calculated increase, the new recurring cost start date, and any retroactive catch-up amount. Adjust the catch-up effective date and remittance message if needed.
  </Step>

  <Step title="Apply the update">
    Click **Update**. The system ends the old recurring cost and creates a new one at the adjusted amount. A catch-up recurring cost record is also created if applicable.
  </Step>

  <Step title="Record the change">
    Go to **Lease Details → Change History**. A record with change type **Data Change – Financial** is auto-created. Add the change sub-type, check **Rent Impact**, add comments, and save.
  </Step>
</Steps>

<Info>The catch-up payment gets its own recurring cost record so it can be included in accounting schedules if needed.</Info>