- This topic has 2 replies, 2 voices, and was last updated 1 year ago by
.
- Posts
For example if the lease term (2 years) is renewable for 3 times at option of lessee and
Q1 – lessee has intention to renew 2 times then shall lease term be considered 2+2+2=6 years? And ROUA and lease liability be for 6 years?
Q2 – lessee had intention to not renew at start of lease and cosidered lease term 2 years roua & lease liability for 2 years also. At the end of first year, lessee changes intension and want to choose renew option for once, i.e. for 2 years. Then what change he will do to the ROUA and lease liability?
Q3 – lessee not had intension to renew and did accounting for 2 years lease. At the end of 2 years he renews one time then what?
A different scenario is that if land (not building) is on 90 years lease on renewable option for lessee then what is lease term and roua & depreciation?
Re your Q1 I would go for 6 years.
If intentions change then we would adjust the RofU asset and liability accordingly.
I don’t understand your last question.
In future it is one question per post please.
- The topic ‘How to treat the renewable option in lease term under IFRS 16?’ is closed to new replies.