**Steps in lease accounting **

## Details for lease accounting

Let us assume the following details for lease accounting as per Ind AS 116

Lease start date: 1-Apr-2019

Lease end date: 31-Mar-2024

Lease payments: Rs. 2,75,000

Payment frequency: Annual – payable at the end

Incremental borrowing rate: 9%

## Step 1: Calculate the right-of-use

The right-of-use is first calculated as follows:

## Step 2: Prepare amortisation schedule

The amortisation schedule based on straight line method is calculated as follows:

## Step 3: Calculate Lease Liability

The lease liability is computed as follows:

## Step 4: Calculate the finance charges

The finance charges for the lease liability is calculated as follows: