UPFRONT PAYMENT FOR VEHICLE ON LEASE

This is complex IndAS 116 treatment again, whether to book it as an expense or capitalise it. I had gone through some resources online and it says that deposits or any prepayals should be capitalised into Right to use asset. The contract does contain a lease component as defined by IndAS. The amortisation of deposit is not clearly described here in this example: https://www.caclubindia.com/articles/impact-of-lease-rentals-and-interest-free-deposits-under-ind-as-116-40629.asp

Technically,

ROU Asset - Asset

Advance- Asset

Direct costs- Asset 

To Lease liability 

Is the entry. It is to included in the cost of asset which means, it is capitalised and amortised. Subsequent treatment suggests that ROU will reduce due to amortisation and depreciation.

Now if car advance payment is 20,000, then 

Year 2

2. 20,000*discount factor= 18,900

3. 20,000*discount factor= 18,500

4. 20,000*discount factor= 17,900

total right to use asset liability which includes 5,000 direct costs is (20,000+18,900+18,500+17,900+5000= 80,300₹)

ROU 80,000₹

To Lease liability 80,300₹