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Financial Reporting

In the Illustration why we did not factored the CPI Index as on Commencement Date which was given in Question to compute Lease Liability and why have we considered CPI Index as on the date of remeasurement ? Video Details ------------- Ind AS - CA Final Ind AS 116 Leases #40. Illustration 33 - Remeasurement

Image 2024-10-01 at 22.21.36_0f0db340.jpg

M Naresh

CA Final

★ 3K+

01-Oct-24 22:25

196

Answers (4)

The lease payment will increase based on the increase in CPI. Means when CPI increases when compared to what it was on inception, only then will we factor the increase.

Seemran Singh

CA Final

★ 4K+

02-Oct-24 10:17

It was 120 know on the date of inception, So we should consider 1,00,000 * 120/100 know . Y we did not consider ?

Thread Starter

M Naresh

CA Final

★ 3K+

02-Oct-24 13:10

See the question is saying for any increase in CPI. To put it simply it is wrong to assume that the starting point of CPI is 100. For this transaction the starting point of CPI is 120 which was on the date of commencement. Even I got confused in the start but the principle is that it is NOT the same as LIBOR where we do 6+3%.

Seemran Singh

CA Final

★ 4K+

02-Oct-24 22:30

As on date of commencement, we will not factor in any future increases in CPI (since we do not know future CPI) On the date of re-measurement, we know the increase in CPI and hence it is factored in.

CA Suraj Lakhotia

Admin

03-Oct-24 13:03

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