Lease Transition capability as per Ind AS 116 and Security deposit recording as per Ind AS 109
Summary: Leases: Transition capability/ working as per Ind AS 116 and Security deposit as per Ind AS 109
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As per Ind AS 116, which requires recording lease transactions as per approach given in standard per se 3 method-
- Retrospective Approach
- Modified Approach Alternative 1 (Partial Approach)
- Modified Approach Alternative 2 (Prospective Approach)
In this approach, we require recording of transition date, recording of RoU (Right of Use) asset and lease liability, and difference, if any, transferred to retained earnings.
Also, as per Ind AS 109, we require recording of security deposit at present value at the time of commencement of lease and recording interest income till the expiration of lease.
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