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CA Final · Financial Reporting · Ind AS 116 Leases

Godavari Retail Ltd, reporting under Ind AS, has a floating-rate lease liability whose payments were linked to a benchmark rate that is being replaced under interest rate benchmark reform. Which statement correctly describes the Ind AS 116 amendments relating to this reform (Phase 2)?

The Phase 2 benchmark reform amendments changed Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116, and an entity applies them for annual reporting periods beginning on or after 1 April 2021. They were not limited to Ind AS 116 or to lessors.

  1. AThey amended Ind AS 116 along with Ind AS 109, Ind AS 107 and Ind AS 104, applicable for annual periods beginning on or after 1 April 2021Correct
  2. BThey apply only to lessors and not to lessees
  3. CThey apply to annual periods beginning on or after 1 April 2016
  4. DThey amended only Ind AS 116 and no other standard

Explanation

Interest Rate Benchmark Reform Phase 2 amended Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116, adding paragraphs 104-106 and C20C-C20D. An entity applies these amendments for annual reporting periods beginning on or after 1 April 2021. The option saying only Ind AS 116 was amended is wrong because several standards were amended.

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