IFRS 16 Leases

This topic has 1 reply, 2 voices, and was last updated 8 years ago by P2-D2.

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November 26, 2017 at 9:12 pm #418131
vikulchik07
Participant
- Topics: 26
- Replies: 12
Hello!

I have a question about the example from the first video about Leases. I don’t understand why we have rental expense in the firs year (we recognise it in P/L). The first year is free from payment.

Thanks in advance!
November 28, 2017 at 10:04 pm #418752
P2-D2
Keymaster
- Topics: 4
- Replies: 7235
Hi,

It is because of the matching concept. If we are using the asset but not paying rent a rental expense will still need to be recognised.

Thanks
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