Hi,
I have a question related to the treatment of a lease rental deposit pertaining to the standards IFRS 9 / IFRS 16.
Being a lessee, I leased a store for running my retail business for period of 3 years. I have to pay rental deposit to landlord and the deposit will be returned by the landlord at the end of the lease term and do not carry any interest cost.
I would like to know if the rental deposit paid should be treated as non-current assets and accounted for at amortised cost? What effective interest rate I should use to discount the deposit amount to present value? Should I use the deposit interest rate of my company as reference discount rate?
Thanks in advance,
Rental deposits - effective interest rate
Re: Rental deposits - effective interest rate
Thanks. But what interest rate I should use for discount?
Re: Rental deposits - effective interest rate
The one that if you put those monies in the bank, how much should you collect ? Maybe ask your bank ?