Question

A company with leases reported according to the operating lease method in 2018. In 2019, an analyst wants to adjust the 2018 numbers so that they become comparable with future IFRS16 numbers, where leases are capitalized. The following information is found in the notes to the 2018 financial statement: “Rental commitments within one year: 11169”, “Rental commitments in two to five years: 34385”, “Rental commitments over five years: 5000”, “Interest rate for leases: 3.0%”, and “Statutory tax rate: 20%”. What would the 2018 lease asset value be on the balance sheet, if the company had applied IFRS16?

Answer 1

As per Ifrs 16 there is exemption to low value assets and leases for period less than or equal to 12 months. So, only 2 to 5 year lease commitment is recognized

Lease asset value = 31,008

As per IFRS 16, upon the introduction there is practica expedient to measure all leases and capitalise them by lessee without verify ing whether it is lease or not as per IFRS 16 dessee has to recognise ROU (Right of use) asset and lease liability for all leases errespective of its type. It should be discounted at implicit rate of interest - în case, if it is not available, with the incremental borrowing rate. Here, given anterest rate for leases -39). However, there are certain exceptions in the new standard IFRS 16, or equal to - As Sets of low value ($ 5000 currency unih 2 - Lease period of less than 12 months In such cases, he is exempted to apply IFRS 16. Amt So, Lease liab?lity" Amt bra og diselepon 31,008 24 Years Period Within one year exempron (cl2m) two to 5 years 34,385 % 0.9018 (Aug of 3841 over 5 years ont SACO exempt clow waue) 2 bol qoral Asset value eu 32.008 Total Asset value.