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CA Final Ind AS 116 Leases — practice questions

Explore 95 free Ind AS 116 Leases questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 116 Leases questions and exercises with answers

Showing questions 1–30 of 95.

At lease commencement, a lessee under Ind AS 116 recognises:Read the answer and worked solution →Ind AS 116 defines a lease as a contract that conveys the right to:Read the answer and worked solution →A lease qualifies as short-term if its lease term at commencement is at most:Read the answer and worked solution →An 8-month lease carries a purchase option. Is it short-term?Read the answer and worked solution →The short-term lease exemption election is made by:Read the answer and worked solution →The low-value asset exemption can be elected on which basis?Read the answer and worked solution →Whether an asset is of low value is judged on its value:Read the answer and worked solution →Which leased asset would NOT qualify for the low-value exemption?Read the answer and worked solution →A tablet will be subleased. Is the head lease low-value exempt?Read the answer and worked solution →Payments on exempt short-term or low-value leases are expensed on:Read the answer and worked solution →A contract is a lease if it gives control of the use of:Read the answer and worked solution →An entity reassesses whether a contract is, or contains, a lease:Read the answer and worked solution →Control of an identified asset needs economic benefits plus:Read the answer and worked solution →A substitution right is substantive if supplier can substitute and:Read the answer and worked solution →A lessee splits contract consideration between components using:Read the answer and worked solution →As a practical expedient, a lessee may elect, by class of asset, not to:Read the answer and worked solution →The lease term includes periods covered by an extension option when:Read the answer and worked solution →5 years non-cancellable plus a 3-year extension surely used. Lease term?Read the answer and worked solution →A 6-year lease lets the lessee terminate after year 4. The lessee is reasonably certain not to terminate. Lease term:Read the answer and worked solution →A rent-free period given by the lessor at the start of a lease is:Read the answer and worked solution →The lease term is reassessed after a significant event that is:Read the answer and worked solution →The right-of-use asset is initially measured at:Read the answer and worked solution →Which item forms part of the cost of a right-of-use asset?Read the answer and worked solution →Liability 2,00,000; prepaid 30,000; incentive 10,000; direct costs 5,000; restoration 15,000. Asset cost?Read the answer and worked solution →The initial lease liability is measured at:Read the answer and worked solution →Which rate is the first choice for discounting lease payments?Read the answer and worked solution →A lessee's incremental borrowing rate is the cost to borrow:Read the answer and worked solution →Which is included in lease payments for the liability?Read the answer and worked solution →A purchase option price enters the lease liability when:Read the answer and worked solution →Index-linked rent is first measured using the index:Read the answer and worked solution →

Worked practice questions

At lease commencement, a lessee under Ind AS 116 recognises:

  1. a contingent liability
  2. a prepaid rent balance
  3. a rent charge for year one
  4. a right-of-use asset and debt
Show answer and solution

Correct answer: D. a right-of-use asset and debt

The standard replaces the old operating lease treatment with one model that books an asset for the right of use and a liability for the payments owed.

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Ind AS 116 defines a lease as a contract that conveys the right to:

  1. buy goods at a price fixed today
  2. own an asset for its entire life
  3. receive staff services from a supplier
  4. use an asset for a period for consideration
Show answer and solution

Correct answer: D. use an asset for a period for consideration

The definition turns on a right to use an underlying asset for a period of time in return for payment, not on ownership.

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A lease qualifies as short-term if its lease term at commencement is at most:

  1. 9 months
  2. 6 months
  3. 24 months
  4. 12 months
Show answer and solution

Correct answer: D. 12 months

Short-term means a lease term of 12 months or less measured from the commencement date.

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More Financialreporting topics

Ind AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment PropertyInd AS 103 Business Combinations