In the year-end balance sheet, where is the carrying amount of the right-to-use asset shown?

• A. Current assets
• B. Non-current assets
• C. Intangible assets
• D. Liabilities

Answer: (B)

When a lease is recognized under IFRS 16, the lessee creates a right-of-use asset that represents the right to use the underlying asset for the lease term. This asset provides economic benefits over more than one year, so it is shown in the balance sheet as a non-current asset (often with its own line item or within property, plant and equipment). The related lease liability is shown separately in liabilities, typically split into current and non-current portions. Only in the case of short-term leases or low-value assets would a right-of-use asset not be recognized.