LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Revaluation of leasehold asset.

Sarita (Audit Manager) (25 Points)

12 August 2012

Whether asset under finance lease can be revalued under IAS 16 like other PPE??

Reply
Follow
Share

1 Replies

CA. Mayur (Service) (147 Points)
Replied 20 August 2012

Reference to paragraph 4 and 27 of IAS 16 shows that it includes finance leased assets as part of its scope and specifically refers to other accounting for a finance lease asset, after initial recognition. So treatment of finance leased assets should be same as owned assets under IAS 16, including revaluation, is consistent with the economic substance of finance leases in that “substantially all the risks and rewards incidental to ownership of an asset” are transferred to the lessee. Accordingly, assets that are recognized under a finance lease by a lessee may be revalued using the revaluation option under IAS 16.

1 Like