IFRS 16 - Revision of Cancellable Period

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arif.asif
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Joined: 20 Mar 2020, 20:52

IFRS 16 - Revision of Cancellable Period

Post 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?
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Marek Muc
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Re: IFRS 16 - Revision of Cancellable Period

Post by Marek Muc »

arif.asif
Posts: 15
Joined: 20 Mar 2020, 20:52

Re: IFRS 16 - Revision of Cancellable Period

Post 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
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Marek Muc
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Joined: 15 Oct 2018, 17:21
Location: Warsaw, Poland

Re: IFRS 16 - Revision of Cancellable Period

Post by Marek Muc »

oh, I thought the overall term was extended

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