Ind AS 116
Introduction: The objective of this standard is to ensure that lessees and lessors provide relevant information in a manner which provides basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the entity. Let us understand the meaning of important terms before understanding the standard Lease : A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. Lease term : The non-cancellable period for which a lessee has the right to use an underlying asset, together with both: (a) It includes the period at which the lessee has an option to extend such lease if it is reasonably certain; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option (i.e not to terminate). Right-of-use asset: An asset that represen...