IND AS-116

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This query is : Resolved

kathir (Querist)

15 December 2021 Dear Expert,

We are the service receiver from Landlords and paid rent on half yearly basis. The payment will be made once agreement received and will update the details in IND AS-116 tools to find ROU, etc.

Here we have received agreement and first payment done in the month of Sep'21 and the details has been updated in the Tools for the FY 21-22( From Feb'21 to Sep'21 ). we have not given any impact for the FY 20-21 but the auditor not agreed and instructed to make ROU& Other related entries for the FY 20-21. Please confirm is this right way.

My doubts.
After receiving agreement only, we will know the agreement start date, rent star date, etc. in this case we have received agreement & 1st payment done in the month of Sep'21 only. This is the reason we have not given any entry impact for this contract for the FY 20-21 ( Feb'21 & mar'21 ). Please confirm, is this mandatory to make the entry for the month of Feb'21 & Mar'21 periods ( ROU, etc ) or shell we make the entries in the FY 21-22.?

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)

09 February 2022 The main focus of IND AS 116 is on the right to use of the asset. Even though there is no agreement entered but the asset is being used or the "right to use" has been transferred, and if there are any monetary transactions IND AS 116 comes into effect and in my opinion, the amount is required to be recognized

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