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Forex Lease Accounting for Termination is happening at termination date exchange rate

edited May 20, 2024 12:33PM in Lease Accounting 2 comments

Lease Booking Exchange Rate = 4

Termination Date Exchange Rate = 3.5

HI All,

We have booked new lease at 4 Exchange Rate and ROU and lease liability is caluclated at that Exchange rate.

After that every month Amortization of ROU is happening with 4 Exchange rate.

We are terminating the lease now but while termination- Gross ROU is becoming Credit with termination Exchange rate (3.5) in place of original Exchange rate which was 4.

We see this behaviour is not correct and Gross ROU should also be reversed on 4 exchange rate in place of termiation exhcnage rate (3.5).

Regards

Ashu Jindal

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