S1: Under Ind AS 116, short-term leases (12 months or less) and leases of low-value assets are exempt from recognizing right-of-use assets and lease liabilities. S2: For these exempt leases, the lease payments are recognized as an expense on a straight-line basis over the lease term. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Under Ind AS 116, short-term leases (12 months or less) and leases of low-value assets are exempt from recognizing right-of-use assets and lease liabilities. S2: For these exempt leases, the lease payments are recognized as an expense on a straight-line basis over the lease term. Which statement(s) is/are correct?
A. Both S1 and S2
B. Neither S1 nor S2
C. S2 only
D. S1 only
Answer: Option A
Solution (By JKSSB Mock Tests)
Both statements are correct. Ind AS 116 provides a recognition exemption for short-term and low-value leases, allowing lessees to simply recognize the lease payments as an expense, typically on a straight-line basis.
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