Superb work yaar. Just to add to your notes - contingent rentals which have derivative characteristics may qualify as embedded derivatives as per  IAS 39 in which case they will have to be seperately recognised and fair valued.

Thanks yar

Hi Narayanan,

Could you pls clarify with the help of a practical example??

how a rent can have a derivative character. Please can you explain ?

Part of rentals may be based on certain index. In such cases, the contingent rentals have the charecteristics of derivatives. If these derivatives are closely related to the lease contract (host contract), then the embedded derivative is not required to be seperately recognised. For instance rentals based on inflation index are closely related to lease contract. These are not required to be recognised. But in case of certain leases, part of rentals may be based on equity index or certain other underlying factors like interest rates. In such cases, the embedded derivatives will have to be seperately recognised.

Do you have any work sheet for implementing IFRS in Fixed Asset Module?

plz send it

I AM LEASING COSTRUCTION EQUPMENT IN KERALA , I COLLECT 4 % VAT UNDER SEC 6(c) 

I HAVE CLAIMED INPUT ON NEW PURCHASE AND PURCHASE MADE FOR MAITAINANCE,

WILL I GET TAX INPUT 

IS THERE ANY CLAUSE 

 I THING I AM DOING OPERATIONAL LEASE

pLEASE PROVIDE INFORMATION

Amit your presentation on IAS 17 is really very good. Would appreciate if you can upload the pdf / downloadable file for the same.
 

Sir

Iam not very clear about the following

"The purchaser in the arrangement has the ability or right to operate the asset or direct others to operate the asset."

We are using some Drilling RIGS for example from Company-X (It is under service contract till now.)

Purchaser/We do not have ability to operate the asset it is to be operated by Company X only.

We direct Company X to operate the Rig. We can not direct any other party to operate it. it has to be operated by Company X only.

Is it covered under codition A of "Arrangement conveys a right to use the Asset"?

Thanks & Regards

Anil

In the above "Arrangement conveys a right to use the Asset", there is an embedded lease in the arrangement. 

The embedded lease could be seen if the following two conditions are met:

Condition 1 - •Is the arrangement dependent on use of particular asset i.e rigs in the instant case? Answer is YES.

Condition  2 - Does the arrangement provide right to use/ control use of asset of X Company? Answer again is YES. 

Can anyone share an example to explain the term "minimum lease payments" under:

1. Cancellable lease

2. Non-cancellable lease

Thanks in advance.

Will it be correct to understand that operating leases can be both cancellable and non-cancellable, while the finance lease can only be non-cancellable?