Hello fellow accountants,
I am Ravishankar Reddy, a Chartered Accountant from India. I have certain doubts as to the accounting treatment of rental deposit paid.
For example, ‘X’ pays rent of $ 10,000 per month for an office premises. He enter into a agreement with his landlord for a period of 3 years. He also pays a rental deposit of $1,00,000. Should there be any accounting effect for the ‘interest lost’ on this rental deposit as the tenant (X) is foregoing $ 1,00,000? Assume market interest rate of 10%
Can anyone explain all the accounting entries pertaining to above for all three years under IFRS?