accounting

Ind AS 116: Leases - Complete Guide

Ind AS 116 leases - right-of-use assets, lease liability, and transition from operating leases.

2 April 2026·Updated 2 April 20261 min read12.5K views
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Ind AS 116: Lease Accounting#

Key Changes#

  • All leases on balance sheet
  • Right-of-use (ROU) asset
  • Lease liability

Recognition#

  1. Measure lease liability

    • Present value of lease payments
    • Discount rate

  2. Recognize ROU asset

    • Lease liability
    • Initial costs
    • Prepayments

Lease Term#

  • Non-cancellable period
  • Extension options
  • Termination options

Short-term/Low-value#

  • Exemptions available
  • <12 months
  • <₹3.5 lakh value

Presentation#

ItemClassification
ROU AssetNon-current asset
Lease LiabilityCurrent + Non-current
InterestFinance cost

Disclosure#

  • Lease expense
  • Maturity analysis
  • ROU asset movements

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