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IFRS 16 - Revision of Cancellable Period

Posted: 14 Jul 2021, 15:20
by arif.asif
During my work I found a lease of 30 years with 10 year payment in advance but the lease agreement has a clause that if the asset is not being used for 5 years then the lease will stand cancelled & forfeited then entity applied for to increase the cancellable period for 2 years for which the entity is required to pay 1.8 million.
What will be the treatment as per IFRS 16?

Re: IFRS 16 - Revision of Cancellable Period

Posted: 14 Jul 2021, 15:29
by Marek Muc

Re: IFRS 16 - Revision of Cancellable Period

Posted: 14 Jul 2021, 16:20
by arif.asif
Lease Modification applies when there is change in scope but in this case there is no change in overall 30 years but only the change from 5 years to 7 years of cancellation

Re: IFRS 16 - Revision of Cancellable Period

Posted: 14 Jul 2021, 17:39
by Marek Muc
oh, I thought the overall term was extended

so what's the impact on lease term and expected payments?