Adapt Currency Lease For Free

The only change is an increase in the lease term. Therefore, if an entity continues to use an existing asset, the new lease contract will be accounted for as a lease modification, and not a separate new lease contract.

The ASC 842 classification system distinguishes between modifications that represent the creation of new leases in substance and those that are simply changes to scope or consideration.

If a lessee enters into a new contract with a lessor (i.e. the original lease agreement remains unchanged) that has the effect of extending the lease term of the existing lease without adding the right to use one or more underlying assets, the new contract should be accounted for as a modification of the existing lease

Broadly speaking, a lease modification is accounted for in one of two ways: 1. It is treated as a separate lease (IFRS 16.44); or 2. It is not treated as a separate lease (IFRS 16.45-46).

Lease Modification: A change to the terms and conditions of a contract that results in a change in the scope of or the consideration for a lease (for example, a change to the terms and conditions of the contract that adds or terminates the right to use one or more underlying assets or extends or shortens the

A lessee is required to reassess lease terms if a triggering event occurs that is within the lessee's control or affects the likelihood of option exercise.Per guidance under ASC 842-10-15-36, a lessee shall remeasure and reallocate the consideration in a contract.

Whenever there is a revision in lease payments due to movement in the underlying index or rate, it results in a remeasurement of the associated lease liability. If there is no lease modification, the revised lease payments are discounted at the original discount rate to work out remeasured lease liability.