IFRS 16 Advance Payment - Cash flow presentation

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azaben
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IFRS 16 Advance Payment - Cash flow presentation

Post by azaben »

I have a question regarding where to present the advance payment on leases in the cash flow stament. under any section of cash flow stems from operations, investing and financing activities>

thank you
JRSB
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by JRSB »

you mean you have paid some office rent in advance, for example?
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Marek Muc
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by Marek Muc »

This payment gives rise to a RoU asset, so I would present it as investing cash flow. However, if the payment is made after the lease commencement date, then it's a repayment of the related lease liability and hence shown within financing activities.

Which scenario applies to you?
azaben
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by azaben »

I paid it in the beginning of the contract as at an advance payment
azaben
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by azaben »

How if I presented in the operating activities as it in the paragraph 50 in the IFRS 16 standard. Is correct to apply this paragraph.

“ 50

In the statement of cash flows, a lessee shall classify:

(a)
cash payments for the principal portion of the lease liability within financing activities;
(b)
cash payments for the interest portion of the lease liability applying the requirements in IAS 7 Statement of Cash Flows for interest paid; and
(c)
short-term lease payments, payments for leases of low-value assets and variable lease payments not included in the measurement of the lease liability within operating activities.”
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Marek Muc
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by Marek Muc »

Does point c apply to your lease?
Leo
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by Leo »

I'm not sure it's even included in para 50 of IFRS 16.

I agree with Marek, it's ROU and it should be presented as operating cash flow.
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Marek Muc
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Re: IFRS 16 Advance Payment - Cash flow presentation

Post by Marek Muc »

*investing
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