• Register
Search Questions / Answers

Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. You can register with your email or with facebook login in few seconds

Get AccountantAnswer App

How will leases with indefinite terms be treated under IFRS 16?


Property leases with indefinite terms will have be shown on the balance sheet under IFRS 16. The question arises how the net present value of future lease payments (=lease liability) will be calculated if the lease term is indefinite (break clauses apply).

asked Sep 15 in IFRS 16 - Leases by anonymous

1 Answer

0 votes
In case of indefinite life we use perpetuity method to calculate the present value of rentals, which is also the value of liability.
Along with it we will keep reassessing the life of an asset and when the life becomes definite the treatment of reassessment will be followed.
answered Oct 31 by OsamaSultan Level 1 Member (1,250 points)


...