A116 In very simple words @RahulSingh you can have a look at it
Alright, imagine you have a toy car that you really like, but you have to pay to play with it every month.
Now, imagine you tell your friend, “Hey, I’ll pay you every month to play with your toy car.” That’s like a lease.
Now, before, people could hide these payments, so it looked like they didn’t owe any money. But that wasn’t fair because they were promising to pay money later.
So, now, with this new rule called Ind AS 116 Leases, they have to write down how much they promised to pay. It’s like writing it in a special book so everyone knows they owe this money.
They write down the money they owe (lease liability) on one side of the book, and they also write down the toy car they can play with (right of use asset) on the other side of the book.
This way, everyone knows about the promise to pay and the fun toy car they can play with.
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