IFRS 16 and IAS 36

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winnie.tran
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Joined: 28 Apr 2021, 03:37

IFRS 16 and IAS 36

Post by winnie.tran »

Hi,

Relation to leases that subjected to IFRS-16 (ROU/Lease Liabs), does these leases still affected by IAS 36, since COVID-19 and CPI in AUS for Mar'22 increased substantially? Because of COVID and interest increased, this might cause the value of asset to be reduced (recoverable amount). ie ROU is higher than recoverable amount - Theoretically, sounds like there’s an impact of IAS36, but it’s they are leases on agreement, not owned, should this part be exempt of IAS36?
Leo
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Re: IFRS 16 and IAS 36

Post by Leo »

Sorry but personally, I haven't heard that ROU (leases) need to be tested for impairment...

But if the consumer price index increases significantly, which might soon be the case here in Europe (if it hasn't already happened), you'll soon hear from your landlord for a rent raise. At that moment, you'll have to adjust your ROU.
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Marek Muc
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Re: IFRS 16 and IAS 36

Post by Marek Muc »

RoU assets are non-financial assets in the scope of IAS 36, but usually they are a part of a CGU

https://assets.ey.com/content/dam/ey-si ... ov2018.pdf
JRSB
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Re: IFRS 16 and IAS 36

Post by JRSB »

I was reading about the theoretical approaches here, and with the associated liability (which a buyer would normally acquire along with the RoU asset) you deduct the lease liability from the carrying value of the CGU assets being tested, and then deduct the same from the total VIU, ignoring lease payments from the VIU itself). That's if I've got it right.
Leo
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Re: IFRS 16 and IAS 36

Post by Leo »

Thanks Marek for this documentation !

@JRSB, I understand the same
winnie.tran
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Joined: 28 Apr 2021, 03:37

Re: IFRS 16 and IAS 36

Post by winnie.tran »

Thank you every one, especially Marek! your docs really helps.
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