Hi !
Question is that:
company A entered into an agreement with company B for lease of equipment for period of six month e.g. 01 April 2022 to 30 September 2022. After expiry of lease period, equipment are return to company B.
Each year same contracts continue with same ROU for period of 6 month.
Is it is short term lease?
If not, what will lease term?
Seasonal short term lease under IFRS 16
Re: Seasonal short term lease under IFRS 16
Yes I'd say completely separate short term leases, particularly since the asset is returned for 6 months.
Re: Seasonal short term lease under IFRS 16
Ok. Thanks
Re: Seasonal short term lease under IFRS 16
I'm not so sure because there is no requirement in the standard for the non-cancellable period to be continuous... Depending on the intention of the company to renew the contract, it would still be a lease under IFRS 16, from my point of view.
Re: Seasonal short term lease under IFRS 16
it is actually covered in IFRS 16:
https://ifrscommunity.com/knowledge-bas ... -contracts
but in the example discussed here, the contracts are not entered into at or near the same time
https://ifrscommunity.com/knowledge-bas ... -contracts
but in the example discussed here, the contracts are not entered into at or near the same time