IndAS 116 to be updated

Try, Mca.gov.in INDAS in google. You’ll have all the standards published.

https://www.mca.gov.in/Ministry/pdf/RuleIndAsEng_30032019.pdf

This is huge and there are changes. Only a working professional can comprehend it. I am following the Right to use asset method. I have pasted double entries for Operating and Finance Lease here in both the books of Lessor and Lessee. I will paste them once again so that you can get a gist of Leases if you like. I’ll delete It off tomorrow as I have pasted the same in another blog. It will become plagiarism. Hope it helps.

Lessee: Operating & Finance Leases are both same.

RTU Asset a/c

To Current liability

To Non Current liability

(Asset recognised at cost equivalent to payments of principle and interest)

Depreciation a/c

To Fixed Asset a/c

(depreciation of asset)

Maintenance, Lease payments a/c

To Current liabilities a/c

(maintenance costs, expenses incurred and reconciled with current Liabilities)

Current Liability a/c

To cash a/c

(Lease payments met for current period)

Lessor: Finance Lease

Lease receivables a/c

To Lease Asset a/c

(Asset derecognised)

Lease receivables a/c

Direct costs

To Total Lease Income a/c

(recognising Lease accruals, direct costs included in investment receivables)

Cash a/c

To Lease receivables a/c

(when Lease instalments are met annually)

Lessor: Operating lease

Depreciation a/c

To Lease Asset a/c

(depreciation charged and impairment could be separately included if there is a need)

Lease Receivables a/c

Initial costs

Operating costs a/c

To Cash a/c

To Lease rental income a/c

(recognising receivables, Initial Lease contract expenses included in receivables and other expenses)

Cash a/c

To Lease Receivables a/c

(when Lease payments are met periodically)

The whole Lease income is recognised in SPLOCI- PL based on accruals and not in instalments.