Ifrs 16 Power Purchase Agreement

Yes, you are! (the point): > when the lease includes purchase taxes that reading cannot reimburse, it is « logical » that non-refundable taxes are part of the costs of the BRI; > if the rents include purchase taxes that the reading can contain! In this case, it is not « logical » that these eligible taxes should be part of the ROA – as a reminder, IFRS 16 rule is « ROA (= initial valuation of rental liabilities) = rental liabilities (= initial valuation of rental liabilities) ». It`s great as usual, thank you. I have a question. Suppose XYZ Company rents a building for its office. The contract is valid for a six-month basis. XYZ has been using this building for 3 years and renews the contract every 6 months. Is this lease excluded from IFRS 16 for < 12-month criteria? I think "substance above form". If it is excluded, don`t you think that IFRS 16 is vulnerable to manipulation of "off-balance-sheet financing"? Thank you Hello Silvia It`s always great to follow you and thank you for the best class we get. In addition, I have doubts about the current scenario I am facing. I work in the UNITED Arab Emirates and we have rented warehouses.

Depending on the contract signed, the duration of the lease is only one year and we can extend it for years to come. Every year we have to renew the treaties. Is it covered by IFRS 16? Or can we treat the same as usual your expertise in the matter is highly appreciated 1- If the contract is less than one year and the value of the assets for example is less than 1,000 dollars, there is a call option or the lessee must buy the asset before the end of this contract. How would the lessee identify this asset? Is it a financial lease? Or let`s say it`s a lease? Hello Sylvia, I hope you are well. And if we had just started a lease with our landlord for 12 months, but they released us 1 month, for a total of 13 months at the price of 12 months. Is it still included in IFRS 16? If so, what will be the accounting bookings? Because we pay in two payments. First payment from the beginning (50%) and remaining (50%) in the middle of our contract. I do not understand the interest charges, because this agreement does not contain an interest rate. Thank you for your help.

Hello. Could you give your opinion on the counting treatment of refundable purchase taxes (for example. B VAT) during the initial assessment of the right to use the ASA? I think there is a small « lack of consistency » in IFRS 16. Although according to IAS 16 (art. 16) Non-refundable taxes on acquisition are part of the costs of PPE, IAS 16 does not apply to the first measure of leases, since leases must be accounted for in accordance with IFRS 16 (IFRS 16 is a « special law »), the problem with IFRS 16 is that it does not contain provisions relating to the impact/treatment of eligible acquisition rights on the initial valuation of ROAs. Since it doesn`t make sense for two leased properties – one with refundable purchase taxes, the other with non-refundable resort taxes – with the same lease plan, to have the same amount of ROA fees, I think (in my opinion) as the typical IFRS 16. 24 (a) should (shall) be interpreted as follows: « The costs of the right of use include: (a) the amount of the first valuation of the rental liability in accordance with paragraph 26 LESS REFUNDABLE PURCHASE TAXES; » Hello Silvia, We have had a lease for the office and warehouse for a few years and we will continue to do so in the future, but the lease is renewed every year (12 months) without the right to sell, in which case IFRS16 applies? If so, there is no specific future period mentioned in the agreement. . . .

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