Ind as 116 Flashcards
(14 cards)
Ind AS 116 is effective from when?
Financial period beginning 1st April , 2019
Recognition exemption for what ?
- Short term lease ( lease term less than 12 months and does not include option to purchase)
- Low value assets.
How to account lease payments if exemption availed?
- Expense to p&l in slm or systematic basis.
Will a lease for which term is subsequently reduced be treated as short term
No. Lease term at date of commencement is considered.
Conditions for asset to be of low value
Only if both are satisfied
- Lessee can benefit from use of at on its own or together with other resources readily available with lessee.
- Asset is not highly dependent or interrelated with other asset.
On what basis lease exemptions can be availed?
- Short term lease - class of underlying asset
2. Low value items - lease by lease basis
Head lease is low value asset lease
Never
What value to consider for low value asset
Value of the asset As if the asset was purchased new.
When shall contact be assessed for a lease
As at date of inception
Definition of a lease
- Contact or part of contact
- Right to use of
- Identifiable asset
- For a period of time
- In exchange for consideration
Date of inception is earlier of
Date of lease agreement
Or
Date of commitment by parties to principal terms and conditions
Identified asset can be explicit or implicit
Yes
Is there right to use if supplier has substantive substitution right
No
When does supplier have substantial substitution right
Both
- Practical ability to substitute throughout period of use
- Supplier benefit economically from exercising such right. ( i.e benefits exceed cost of substitution)
