For a time charter hire agreement of a vessel with duration of more than 12 months, a right of use of the vessel should be recognized on the balance sheet of the charterer.
If at the expiration of the hire period the parties signed an extension of the existing time charter hire agreement for further 9 months, is there an obligation for the recognition of a right of use of the vessel for the additional period of the 9 months or the hire fees for the this period should be posted directly to P&L as expense?
Thank you.
Extension of lease agreement
Re: Extension of lease agreement
lease modification - remeasure liability using revised discount rate and revise asset accordingly
Re: Extension of lease agreement
substance is it's an extension, even if technically a new lease
Re: Extension of lease agreement
Thank you for your answer
Re: Extension of lease agreement
For clarity, I would add just one more thing: you need to remeasure the lease liability and the right of use asset as per the modification date (i.e. the date you agree to extend the lease).
Re: Extension of lease agreement
Do you mean to treat it as a "new lease agreement" and to calculate the right of use by discounting the lease payments from the date of the extension of the agreement until its expiration (i.e. after 9 months)?
Thank you
Thank you
Re: Extension of lease agreement
There won't be any P/L impact, just a new RoU asset and lease liability:
https://ifrscommunity.com/knowledge-bas ... rate-lease
https://ifrscommunity.com/knowledge-bas ... rate-lease