Ch 3 · Ind AS 116 — Leases

5 concept points · 3 formulas · 4 exam-critical points.

📘 Core concepts

• 1Single lessee model: virtually all leases on balance sheet (Right-of-Use asset + lease liability).
• 2Exceptions: short-term (≤12 months) and low-value (typically <$5000) leases.
• 3Lessor accounting retained — operating vs finance lease classification.
• 4Lease liability = PV of lease payments; ROU asset = lease liability + initial direct costs + prepayments − incentives.
• 5Subsequent measurement: ROU depreciated, liability accreted at IRR.