Lease Accounting Calculator · Updated August 2026

IND AS 116 / IFRS 16 Lease Accounting Calculator

IND AS 116 is the Indian Accounting Standard that governs lease accounting, requiring lessees to bring almost all leases onto the balance sheet. Effective from 1 April 2019, it replaced IND AS 17 and is substantially converged with the international standard IFRS 16. Lessees recognise a Right-of-Use (ROU) asset and a corresponding lease liability, measured at the present value of future lease payments, and replace straight-line rent expense with depreciation on the ROU asset plus interest on the liability.

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Enter lease details Commencement, term, IBR, payment
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Click Calculate Instant on-screen results
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Lease Parameters
⚠ Please fix the following before calculating:
Core Lease Details Required
Required
Enter 1–600
Enter IBR between 0.1% and 50%
Payment Details Module 1
Enter valid amount
Initial Direct Costs & Incentives Module 2
Legal fees, broker, stamp duty
Fit-out, rent-free deduction
Reporting Date Snapshot Module 3
Leave blank to skip snapshot (e.g. 31 March 20XX)
Escalating or variable rent? Use Model 3 →  |  Lease modification? Use Model 2 →
Standards Compliance
Ind AS 116 / IFRS 16 aligned. Effective interest method for liability. ROU Asset = PV of lease payments + Initial Direct Costs − Lease Incentives received. SLM depreciation over lease term. Supports monthly, quarterly, half-yearly & annual payment frequencies.
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Enter lease details to calculate

Fill in the parameters and click Calculate Lease Schedule

Frequently Asked Questions — IND AS 116 / IFRS 16

What is the Incremental Borrowing Rate (IBR) and how do I determine it?
The IBR is the interest rate the lessee would have to pay to borrow funds — over a similar term and with similar security — to obtain an asset of similar value. In practice, Indian companies typically use the rate on comparable bank loans, NBFC borrowings, or the company's weighted average cost of debt. For most SMEs, IBR falls between 8% and 14% p.a. If you are unsure, consult your CA or use the company's latest term loan rate as a proxy.
What leases are exempt from IND AS 116?
IND AS 116 provides two practical expedients: (1) Short-term leases — lease term of 12 months or less at commencement date (including renewal options). (2) Low-value asset leases — underlying asset with a value of approximately USD 5,000 (roughly ₹4 lakhs) or less when new. Common examples: laptops, mobile phones, small office equipment. These can be expensed directly to P&L. The exemptions apply on a lease-by-lease basis.
What is the difference between current and non-current lease liability?
The lease liability must be split for balance sheet presentation. The current portion is the principal repayment expected within the next 12 months from the reporting date. The non-current portion is the remaining balance due beyond 12 months. This tool automatically computes both based on your reporting date input. The finance charge (interest) is expensed through P&L — it does not form part of the current/non-current liability.
How is the Right-of-Use (ROU) asset calculated?
ROU Asset at commencement = Present value of lease payments + Initial Direct Costs (IDCs) − Lease Incentives received. IDCs are incremental costs of obtaining the lease (broker fees, legal fees, stamp duty). Lease incentives are benefits received from the lessor (rent-free periods, fit-out contributions). The ROU asset is then depreciated on a straight-line basis over the lease term. Depreciation and finance charge together replace what was previously a single "rent expense" under the old standard.
What journal entries does IND AS 116 require?
Four standard journal entries are required: (1) Commencement — Dr. ROU Asset / Cr. Lease Liability (recognition at PV). (2) Each period — Finance charge — Dr. Finance Cost / Cr. Lease Liability (interest accrual). (3) Each period — Payment — Dr. Lease Liability / Cr. Bank (cash outflow). (4) Each period — Depreciation — Dr. Depreciation Expense / Cr. Accumulated Depreciation on ROU Asset. This tool generates all four entries for every period automatically.
Does IND AS 116 apply to all companies?
IND AS 116 is mandatory for all companies that are required to follow Indian Accounting Standards (IND AS) — primarily listed companies and their subsidiaries, and unlisted companies with net worth above ₹250 crore. Companies following AS (IGAAP) follow AS 19, which uses the older operating/finance lease classification. IFRS 16 is the equivalent international standard and follows the same single-model approach as IND AS 116.
How does IND AS 116 affect EBITDA and the income statement?
IND AS 116 typically improves EBITDA because the old rent expense (which was above EBITDA) is replaced by two charges that sit below EBITDA: depreciation on the ROU asset and finance cost on the lease liability. For example, if annual rent was ₹12L, EBITDA increases by ₹12L — but EBIT and PBT are broadly unchanged (depreciation + interest ≈ old rent expense). This is why companies with large operating leases (retail, airlines, hospitality) report significantly higher EBITDA under IND AS 116. Analysts often look at "pre-IFRS 16 EBITDA" as an adjusted metric for comparability.
What happens when a lease is modified or terminated early?
A lease modification (e.g., extension of term, change in payments) generally requires remeasurement of the lease liability at a revised discount rate, with a corresponding adjustment to the ROU asset. If the modification effectively creates a new lease (e.g., adding a new asset), it is accounted for as a separate lease. Early termination results in derecognition of both the ROU asset and remaining lease liability — any difference is recognised as a gain or loss in the income statement. Always document the modification in writing and obtain board approval before updating your lease schedules.
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