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CA Final · Financial Reporting · Ind AS 116 Leases

Ashoka Infra Ltd. is preparing its Ind AS financial statements. A director observes that Ind AS 116 omits the IFRS 16 option allowing a lessee to measure right-of-use assets that meet the definition of investment property at fair value. What is the reason for this difference?

The fair value option for right-of-use assets meeting the investment property definition is absent because Ind AS 40 does not permit the fair value model. Consequently the IFRS 16 paragraph providing for it was deleted in Ind AS 116, and the related reference in paragraph 29 was removed.

  1. AInd AS 40 does not allow the use of the fair value model, so the related paragraph was deleted in Ind AS 116Correct
  2. BInd AS 116 requires all right-of-use assets to be measured at revalued amounts
  3. CInd AS 116 exempts right-of-use assets from subsequent measurement requirements
  4. DInd AS 40 requires fair value only for assets held under finance leases

Explanation

The comparison with IFRS 16 explains that Ind AS 40 does not allow the fair value model. Hence IFRS 16 paragraph 34 was deleted in Ind AS 116, and the reference to it in paragraph 29 was removed. The other options misstate this reason.

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