alleryStart learning →Interest on the lease liability each period is computed on the:
Atotal undiscounted payments
Bliability at commencement
Ccarrying amount of the asset
Dremaining balance of the liability
Answer & Solution
Correct answer: D. remaining balance of the liability
A constant periodic rate on the outstanding balance makes interest fall as the liability is repaid.
Keep practising Ind AS 116 Leases
Browse all Ind AS 116 Leases questions for CA Final, or explore more Financialreporting topics.
Related questions
Ind AS 116 applies to annual reporting periods beginning on or after:At transition, a practical expedient lets an entity avoid reassessing:Modified retrospective adoption: the cumulative effect goes to:Asset worth Rs 5,00,000 sold for Rs 4,60,000 in leaseback at market rent. Rs 40,000 shortfSame sale-leaseback: total gain is Rs 2,00,000 and the retained right is 25% of fair valueSale-leaseback: carrying Rs 4,00,000; fair value Rs 6,00,000; PV of market lease payments A sale and leaseback transfer fails the sale test. The seller-lessee:In a sale and leaseback, whether the transfer is a sale is decided using: