Question

ABC Ltd. records a lease as an asset and a corresponding liability in its books under Ind AS 116. The company uses this asset in operations and depreciates it annually. The lease liability is also reduced over time. How will this transaction affect the company’s balance sheet and profit and loss statement?

A Only balance sheet is affected
B Only P&L is affected
C Both P&L and balance sheet are affected
D Only the cash flow is affected
E Not recorded as lease
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