- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
“A lease liability is subsequently measured using a method similar to the amortised cost effective interest method (ie the amount that reflects the unwinding of the discount rate on the remaining balance of the liability). This is similar but not identical to the amortised cost effective interest method used for debt instruments in IFRS 9 because the rate used in the discounting may not be the implicit rate of interest in the lease.”
What does the last sentence mean and how does the amortised cost differ between IFRS 16 and IFRS 9?
Hi,
Don’t bother it is the same.
The point they are trying to make is that under IFRS 16 when the implicit rate in the lease is not readily available, the entity’s incremental borrowing rate should be used instead.
This is the reason why it says: “because the rate used in the discounting may not be the implicit rate of interest in the lease”KR
Kay
- You must be logged in to reply to this topic.