Late lease payments under IFRS 16

[Yousaf]

Hi !

company A entered into a contract for lease of land with company B on agreed monthly rental Rs. 100 for period of 3 year.

Lease contract length and reporting date are same e.g. 01 July 2021 to 30 June 2022

company A measure lease liability and ROU as per IFRS 16. Due to some financial problem, company A not made the payment for the month of June 2022. company A has made the payment of June 2022, July 2022 and August 2022 on September.

Question is that:

What will be the impact of such event on lease liability? We remeasure the lease liability? Impact on interest expense?

[Marek Muc]

did A pay any late payment interest?

[Yousaf]

No. due to long term relationship with lessor, company A no pay any penalty.

[Marek Muc]

I would just do nothing, i.e. stop accruing interest expense after the due date, even if the actual payment takes place at some later date. But it's not something that is explicitly covered in IFRS 16.

[Yousaf]

Ok Thanks. I agreed with your point of view.