Variable lease payments in a nutshell
Hi all! Introducing a New Model for Variable Lease Payment Adjustments under IFRS 16 / Ind AS 116 Today, we’re unveiling a unique and advanced model for handling variable lease payment adjustments under IFRS 16 and Ind AS 116. This model goes beyond the conventional lease schedule in arrears and incorporates index-linked remeasurements and impairment considerations. Let’s walk through it step-by-step. (Note: This assumes you’re already familiar with how to create a basic lease amortization schedule using fixed payments in arrears.) 1. Opening Balance = PV of lease payments and for subsequent years, its C/B. 2. Interest = Implicit rate & won’t change throughout the schedule in this problem. 3. Variable Lease Payments = It is revised for the next year. Therefore, the revised payment for 2018 is €161,458 (i.e. €155,000 x 125/120). The same methods...
