Sub lease

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Yousaf
Posts: 53
Joined: 17 Aug 2022, 08:58

Sub lease

Post by Yousaf »

Hi,


Question is that:

Entity A lease 250 Acre land from Entity B for period of 5 years and recognized lease liability and ROU as per IFRS 16.

On 3rd year of lease, entity A sub lease 200 acre to entity C for period of one year.

We have recognized ROU for 5 year on 250 acre of land.

Either, we have to derecognized the ROU for entire period (200 acre for all remaining period e.g. 3 year) because we have no any right and assets?

Either, we have to derecognized the ROU for one year only and remaining 2 year relevant to 200 should recognized in books of accounts?
JRSB
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Joined: 01 Mar 2020, 01:10
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Re: Sub lease

Post by JRSB »

Yousaf
Posts: 53
Joined: 17 Aug 2022, 08:58

Re: Sub lease

Post by Yousaf »

Its means, it will be classified as operating lease?
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