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How will leases with indefinite terms be treated under IFRS 16?

Property leases with indefinite terms will have be shown on the balance sheet under IFRS 16. The question arises how the net present value of future lease payments (=lease liability) will be calculated if the lease term is indefinite (break clauses apply).

asked Sep 15, 2017 in IFRS 16 - Leases by anonymous

1 Answer

0 votes
In case of indefinite life we use perpetuity method to calculate the present value of rentals, which is also the value of liability.
Along with it we will keep reassessing the life of an asset and when the life becomes definite the treatment of reassessment will be followed.
answered Oct 31, 2017 by OsamaSultan Level 1 Member (1,250 points)