Ch 6: IFRS 16 Leases 

1. Identifying a lease

1-2 Q&A Capri Ice and Yardley Limited (ICAP Spring 2021) [O]

2. Definitions and Concepts

2-1 Definitions and Concepts [R]

2-2 Q&A Sher Khan Limited [R]

3. Accounting by lessee

3-5 Q&A Miracle Textile Limited [O]

3-7 Q&A Progress Limited [O]

YouTube Video (12 Minutes)

Notes PDF - FR079

Query: Sir in progress limited: The statement " interest rate was duly communicated to progress ltd" What dies this statement imply?  And what if the rate was not communicated? 

Response:  It means the lessor has communicated "Interest rate implicit in the lease" to lessee and this rate should be used by lessee in calculation as it is known to lessee. When such rate is not known to lessee (i.e. if such rate was not communicated), the lessee uses "lessee's incremental borrowing rate" for calculation (see Q&A Dettol Limited and Lifebuoy Limited for such scenario).

Which rate should be used in various IFRS 16 situation? Watch this:

3-8 Q&A Coal Limited (ICAP Autumn 2019) [R]

4. Accounting by lessor

4-1 Accounting by lessor [I]

YouTube Video (25 Minutes)

Notes PDF - FL059

Query: Sir below what percentage of life should a lease be classified as operating lease?

Response: No percentage specified in IFRS 16. Generally lease term  less than 75% of economic life is considered operating lease.

4-2 Q&A Jhang Construction [X]

4-3 Q&A Shoaib Leasing Limited [O]

4-7 Q&A Shalimar Industries (ICAP Spring 2016) [R]

4-8 Q&A Galaxy Leasing Limited (ICAP Autumn 2014) [O]

4-9 Q&A Square Limited (ICAP Spring 2019) [R]

5. Comprehensive Examples

5-1 Q&A Guava Leasing Limited (ICAP Autumn 2018) [I]

5-2 Q&A French Vanilla Leasing Limited (ICAP Spring 2020) [I]

5-3 Q&A Dettol Limited and Lifebuoy Leasing Limited (ICAP Spring 2021) [I]

5-4 Q&A Sagahi Autos Limited (ICAP Autumn 2021) [I]

5-5 Q&A Fakhr Limited (ICAP Autumn 2020) [R]

YouTube Video (21 Minutes)

Notes PDF - FR111

Query: Far1 ka course far2 ke paper me ATA hai Kya. Far2 ke lease ke chapter me ye question diya hua hai. Jisme ias 40 and socie ka bhi Jiski practice nahi hai

Response: Yes. According to page 5 of CAF syllabus and Education Scheme 2021, Topics covered in testing level 1 will include the following: "All topics assessed at earlier stages of qualification."

Query: Sir is ma depreciation ko reverse Q kr rha ha ?? Kindly bta dn. Agr dereciation reverse ki ha to new depreciation charge nhi krga FV pr?

Response: Depreciation is NOT charged under fair value model applicable to IAS 40 Investment Property.

6. Objective Based Q&A

6-1 MCQs 1 to 15 | IFRS 16 [R]

6-2 MCQs 16 to 25 [R]

YouTube Video (14 Minutes)

Notes PDF - FM029

Query: sir in mcq 23. what amount would be recorded as investment in lease if rentals are 1.8 million?

Response:  Same Rs. 5,000,000 (since fair value would be lower than PV of lease payments using market rate of interest).

7. Additional Practice Q&A

7-1 Q&A Optimism Limited (ICAP Spring 2022) [I]

YouTube Video (27 Minutes)

Notes PDF - FR159

Query: Sir is mn jo urv find ki hy us main intrest rate 11 lya hy jb k mrket raye 12 hy to lessor k point of view sy 12 nae ln gy kiun k woh higher hy kindly agr bta dn

Response: There is no rule as to use higher rate. Interest rate implicit in the lease is used. We have a short video on which rate to be used in which situation in accordance with IFRS 16: Click here

7-2 Q&A Nonagan Leasing (ICAP Autumn 2022) [R]

YouTube video (11 Minutes)

Notes PDF - FR191

Query: Point 2 ku consider kren gy wo to lesse sa related ha na extension

Response: This information is relevant to both. NL will use it from its own perspective for lease term.