Entity 'A' lease a vehicle from a bank B.
Reporting date of A is 30 September 2023.
Lease commencement date is 01 September 2023.
Rental shall be paid monthly.
Entity A has paid one rental till reporting date but underlying asset (vehicle) not yet delivered to the A...
As at reporting date, Are lease liability would be recognized ? Right of use assets as at reporting date not in the books of A.
Is this transaction within scope of IFRS 16 ?
IFRS 16 " Scope of IFRS 16"
Re: IFRS 16 " Scope of IFRS 16"
As per Para BC 141, IFRS 16 requires a lessee to initially recognise and measure right-of-use assets and lease liabilities at the commencement date (ie the date on which the lessor makes the underlying asset available for use by the lessee).
In our case, assets (vehicle) not delivered to the entity A as at reporting date but monthly rental payment commence... We also recognized ROU as at reporting date ?
In our case, assets (vehicle) not delivered to the entity A as at reporting date but monthly rental payment commence... We also recognized ROU as at reporting date ?
Re: IFRS 16 " Scope of IFRS 16"
No, you don't recognise RoU yet, these payments should be treated as prepayments.