IFRS 16 : Leases

Question 1

Agar asset at the end of lease agreement title humein transfer hojay(being lesse) toh depreciation kese hogi?

Answer 1

Depreciation uss ki useful life pe kro kiu k asset transfer hojana hai.

Question 2

Agar being lessee, at the end of leased term, asset humein transfer nahi hona toh depreciation kese hogi?

Answer 2

Agar asset transfer nahi hona toh depreciation Lease term pr hogi.

Question 3

Optional period?

Answer 3

Sometime, lesse apko lease term end honay k baad further kuch period k liay asset lease pr de deta hai but at very minor rentals as an incentive. This additional period is called Optional Period.

Example:
- Asset is leased for 5 years at rental of 50,000 RS but it can be further leased for 2 years at rental of 25000 RS.
- The two year period is optional period.

Question 4

Non-Cancelable period?

Answer 4

Wo period joh asset optional period se pehlay ata hai and which is not cancellable.

Example:
- Asset is leased for 5 years at rental of 50,000 RS but it can be further leased for 2 years at rental of 25000 RS.
- The 5 year period is non-cancellable period.

Question 5

Treatment of Cancellable and optional period if decision is to avail optional period?

Answer 5

Under IFRS 16, The term of the lease will be:
Non-Cancellable period + Optional Period.

Example:
optional period: 2 years
non-cancellable period: 5 years.

Then,
Total Lease Term: 5 years.