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CA Final · Financial Reporting · Ind AS 116 Leases

Vihaan Power Ltd has a floating-rate lease liability whose payments were linked to a benchmark rate, and the benchmark is being replaced under interest rate benchmark reform. The finance head asks from when the Phase 2 amendments to Ind AS 116 were required to be applied. What is correct?

The Interest Rate Benchmark Reform Phase 2 amendments to Ind AS 116 apply to annual reporting periods beginning on or after 1 April 2021. They were inserted by a notification dated 18 June 2021 and also amended Ind AS 109, Ind AS 107 and Ind AS 104.

  1. AAnnual reporting periods beginning on or after 1 April 2021Correct
  2. BAnnual reporting periods beginning on or after 1 April 2015
  3. CAnnual reporting periods ending on 31 March 2020
  4. DOnly for periods beginning after 1 April 2024

Explanation

The Interest Rate Benchmark Reform Phase 2 amendments, which amended Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116 and added paragraphs 104-106 and C20C-C20D, apply to annual reporting periods beginning on or after 1 April 2021. The 2015 date relates to the original Rules, not these amendments.

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