IND AS 116 / IFRS 16: The standard that changed the game for lease accounting.

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Ankit Arora

Statutory Auditor

3 Points Joined August 2025

I've been working on a solution to simplify this. I'm excited to share that I have developed a comprehensive lease calculator based on the principles of IND AS 116 and IFRS 16.

This tool is designed to help professionals and businesses:

Calculate the Right-of-Use (ROU) Asset and Lease Liability with precision, considering all key variables.

Generate an Accurate Amortization Schedule for both the ROU asset and lease liability, month by month.

Simplify the calculation of interest expense and depreciation, ensuring compliance with the standard's requirements.

This isn't just a spreadsheet; it's a tool built to take the guesswork out of a complex standard, saving valuable time and reducing the risk of non-compliance. It's a testament to how we can use practical tools to navigate the evolving accounting landscape.

Link to the tool:
https://llamacoder.together.ai/share/v2/Jn3FgHfcxJtJ6R5O

What's the most challenging aspect of implementing IND AS 116/IFRS 16 that you have faced? I'm keen to hear your experiences.

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9489 Points Joined December 2011

The most challenging aspects of implementing IND AS 116/IFRS 16 often involves determining the lease term, assessing whether a contract conains a lease, and calculating the discount rate for measuring the lease liability. Companies also struggle with gathering and maintaining the necessary data for all leases, especially for companies with a large number of leases. Ensuring compliance with the standards requirements for disclosure and presentation in financial statements can also be challenging.

Ankit Arora

Statutory Auditor

3 Points Joined August 2025

You've perfectly nailed the most challenging aspects of IFRS 16. It's a standard that, for all its benefits in transparency, can feel like a mountain of manual work and judgment calls. I completely agree with your assessment.

The way I see it, the challenges you've highlighted fall into two distinct buckets, and the solutions for each are different:

1. The Data and Computation Problem Let's be honest, manually collecting data from hundreds of lease contracts and then recalculating liabilities and right-of-use assets is where most of the pain lies. This is a task ripe for automation. As we've discussed, platforms that use AI and NLP can read contract terms, extract data, and automatically create and maintain amortization schedules. Your own lease calculator was a brilliant step in this direction, and now we're seeing commercial tools take that a step further, handling everything from data entry to audit trails.

2. The Professional Judgment Problem This is where our value as CAs truly shines. While AI can handle the numbers, it can't make the nuanced judgment calls you mentioned. Things like determining the lease term in a complex contract or selecting the right discount rate require human insight, experience, and professional skepticism. Our role is to use AI to get the data right quickly, so we can dedicate more time and focus to these critical areas of judgment.

The goal isn't to replace our expertise but to use technology to free us from the grunt work, allowing us to focus on what matters most. That's the ultimate professional win.