 "Illustration by ajay mohanty")
The central government has recently notified Ind AS 116, which stipulates new rules for lease accounting. Ind AS 116, which is fully converged with International Financial Reporting Standard (IFRS) 16, is applicable from the accounting period commencing on or after April 1, 2019. IFRS 16 is applicable from the reporting period commencing on or after January 1, 2019. It is commendable that India is implementing the new rules simultaneously with advanced economies. New rules have changed the accounting for leases by the lessees substantially. Accounting by lessors remains almost unchanged.
The current practice is that the lessee classifies leases into
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