Under Ind AS 116, if a lease contract is modified and the modification is not accounted for as a separate lease, how should the lessee remeasure the lease liability?
A.By using the prevailing market rate for similar leases at the end of the lease term
B.By using the original implicit rate in the lease
C.By using the revised discount rate at the effective date of the modification
D.By using the lessee's incremental borrowing rate at the inception of the lease
Explanation:
Under Ind AS 116, a lease modification not treated as a separate lease requires the lessee to remeasure the lease liability using a revised discount rate at the effective date of the modification.
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