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Key money to lessor for acquiring rights in the business.

shakeel (GFM) (38 Points)

17 February 2021

A key money has been paid to the lessor to acquire interest in his running business. How it should be treated in accounts as per IFRS 16 or any other standard?

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3 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 17 February 2021

Key money is rentals? Acquiring interest in lessor business is consolidation standard and to understand the nature of acquisition it is business combinations standard.

shakeel (GFM) (38 Points)
Replied 17 February 2021

Lessor is already running business on the premises where he is willing to share half portion with lessee on condition of regular sharing of rentals and a non refundable key money payable in the begining.