IFRS16 extension of lease

[Descy]

Hi! So here is my question:

Company A enters into a lease agreement for an office with Company B for two years plus two more years an an extension option.

At the expiry of the four years, they decide to extend the lease for another two years. Is this a new lease agreement? Should we recognised a new RoU asset and liabilty?

[Marek Muc]

So they didn't vacate the office, but instead signed the lease extension before the end of the fourth year. Is my understanding correct? If so, a reassessment of the lease term should have been made before the end of four-year term. More on this:
https://ifrscommunity.com/knowledge-bas ... ease-term/

[Descy]

They didn't vacate the office, but they signed the extension on the last day of the old contract. Lets say the old contract was for the period upto 01/12. The nea extension document is signed on 01/12 also.

[Marek Muc]

But it was clear before 01/12 that they won't vacate the office. You need to look at broader economics of the lease when assessing the lease term, please refer to the knowledge base article that I linked to in my previous post.