IND AS 116, LEASES

We are leasing house property on rental-11 months lease for commercial use.

Whether this IAS 116 will be applicable to us?

Please guide

Replies (1)

IAS 16 (Property, Plant and Equipment) is applicable to property held for use in the production or supply of goods or services, or for administrative purposes. However, IAS 16 does not apply to property held for rental purposes. Instead, you should refer to IAS 40 (Investment Property), which deals with investment property, including property held for rental purposes. Since you are leasing a house property for commercial use on an 11-month lease, IAS 40 would be applicable to your situation. However, if you are the lessee (renter), you should refer to IFRS 16 (Leases), which deals with accounting for leases. To summarize: - IAS 16: Not applicable (deals with property held for use, not rental purposes) - IAS 40: Applicable (deals with investment property, including rental purposes) - IFRS 16: Applicable (if you are the lessee, deals with accounting for leases)

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