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Chapter 7

To calculate the lease liability and right-of-use asset entities must establish the length
of the lease term.

IFRS 16 says that the lease term comprises

 Non-cancellable periods

 Periods covered by an option to extend the lease if reasonably certain to be
exercised

 Periods covered by an option to terminate the lease if reasonably certain not to
be exercised

Illustrations and further practice

Now try TYU 3 from Chapter 7.

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