Impact of Indian Accounting Standard Ind AS 116 Lease Accounting on indian industries

Hi All,

Have a couple of queries w.r.t IND AS 116

  1. I assume the lease liabilities in the Balance sheet are the remaining lease payments discounted using some rate. Is this correct?

  2. I see that some of these companies have a Right of Use Assets under the Fixed Assets part in BS. And these are depreciated in the P&L. Can someone help me understand why are RoU Assets depreciated if they are leased assets?

  3. How do we apply valuation techniques to these companies who has shifted to the new accounting standard? For e.g let’s say I want a fair comparison of Free Cash Flow across 5 years how can we achieve this?

Apologies if the questions may sound dumb. No finance background :slight_smile:

Update: I managed to find a very good article explaining how Lease Liabilities and RoU Assets are depreciated and financed. Others who have a non-finance background may find it helpful - https://www.accaglobal.com/hk/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/ifrs16.html