IFRS 16 OR IAS 16???

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Audit Shj
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Joined: 12 Jan 2020, 12:47

IFRS 16 OR IAS 16???

Post by Audit Shj »

I would like to take your opinion on a case ..

A Company has signed a contract for the supply and use of an Innovative equipment. as per the contract;

1) 3 mm down-payment
2) annual EMI of 1 million from 1- 8 years (Total 10 Million under the deal)

Alternatively The machine cost is 9 million and annual charge of 500K if on purchase option, wherein the 9 Million has to pay upfront- [These rates were available as part of the contract]. The company opted for the first option..

The ownership gets transferred once all payments settled.. Is it a lease and will IFRS 16 apply, If not please can you share your inferences in this case..
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Marek Muc
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Joined: 15 Oct 2018, 17:21
Location: Warsaw, Poland

Re: IFRS 16 OR IAS 16???

Post by Marek Muc »

And what is your opinion after reading this page?:

https://ifrscommunity.com/knowledge-bas ... g-a-lease/
JRSB
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Joined: 01 Mar 2020, 01:10
Location: UK

Re: IFRS 16 OR IAS 16???

Post by JRSB »

the question reads exactly like an exam question on the topic! (maybe it is one?) :?:
Student of IFRS.
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Marek Muc
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Posts: 1703
Joined: 15 Oct 2018, 17:21
Location: Warsaw, Poland

Re: IFRS 16 OR IAS 16???

Post by Marek Muc »

you're probably right! an exam question or some kind of homework :)
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