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      Question

      Which accounting treatment is appropriate for assets

      given on finance lease (lessee perspective) under Ind AS?
      A Recognise as operating lease expense only Correct Answer Incorrect Answer
      B Recognise right-of-use asset and lease liability at commencement Correct Answer Incorrect Answer
      C Do not recognise anything on balance sheet Correct Answer Incorrect Answer
      D Recognise full asset as owner's asset and no liability Correct Answer Incorrect Answer
      E Treat as contingent liability Correct Answer Incorrect Answer

      Solution

      Ind AS 116 requires lessee to recognise ROU asset and lease liability for most leases.

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