Lease Liabilities Audit Working Paper (Ind AS 116) — ICAI Audit Working Paper

The lease liabilities audit working paper (ind as 116) working paper from ICAI AASB's Audit Working Paper Templates (June 2023). Pre-stamped with your firm letterhead, editable in Word.

Free · ICAI AASB (June 2023)

Updated 28 May 2026

Source

ICAI AASB (June 2023)

Chapter

3. Execution

Section

3.14

Format

Microsoft Word (.docx)

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Your firm — letterhead

Appears at the top of the document as the audit firm letterhead.

Audit firm name

Audit firm address

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Engagement partner

ICAI membership no.

Firm registration no.(optional)

Engagement details

The client and period this document is for.

Client / company name

Period ended

The financial year-end this engagement covers, e.g. 31 March 2026.

Date of letter

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Lease Liabilities Audit Working Paper

28 August 2026

(Following draft may be used as an example)

Purpose:

The purpose of this workpaper is to verify the leases obtained by XYZ Company Private Limited

Procedures Planned:

Check the point of time on which the payment for leases is to be made (Beginning or end).
Check whether there is any:
Increase in rental during the period.
Period for which the effect of increase in rentals
Period for which lease is entered.
Discounting rate used at the time of initial recognition of ROU assets and lease liabilities.
At the time of initial recognition, the ROU assets and lease liabilities should be reconciled.
ROU assets should be written off on SLM basis over the lease period.
Check whether interest on lease liability is charged on closing balance.
At the end of lease period, ROU assets and lease liability should be turned ‘NIL.’

Procedures done:

Period for which journal entry passed has been verified based on the date of entry.

Checked the nature of expenditure/income & effect of the same on prior period financial statements.

The lease liability has been verified on the basis of GL effecting the financial statements.

Checked the lease liability based upon the journal entry date mentioned in narration.

Specific Invoice number has been verified on sample basis & effect of the same on the Income/Expenditure & Asset/Liabilities has been reconciled.

Observation and conclusion:

On the basis of audit procedure, we reach to a conclusion that nothing adverse was observed for auditors to write any significant observation.

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What’s inside

An excerpt from the template.

The purpose of this workpaper is to verify the leases obtained by XYZ Company Private Limited

Check the point of time on which the payment for leases is to be made (Beginning or end).
Check whether there is any:
Increase in rental during the period.
Period for which the effect of increase in rentals
Period for which lease is entered.

Period for which journal entry passed has been verified based on the date of entry.

Checked the nature of expenditure/income & effect of the same on prior period financial statements.

↑ Excerpt only — the full template is what you download as Word

About this template

What you’re downloading, and when to use it.

This template follows the format published by the Institute of Chartered Accountants of India (ICAI) in the AASB Audit Working Paper Templates (June 2023), the authoritative reference for Indian statutory-audit documentation. Fill in your firm’s letterhead and the engagement details on the form above, click Download Word file, and you’ll get a fully formatted .docx ready to use.

Everything is generated in your browser and on a stateless API endpoint — no account, nothing stored on our servers. We’ll ask for a work email once before your first download so we can send you the file and the occasional relevant update; after that, downloads on this device are instant. Edit freely in Word, Google Docs or Pages before sending to your client.

Common questions

FAQs.

What changed under Ind AS 116 that this working paper needs to test?

Ind AS 116 requires almost all leases, except short-term and low-value ones, to be recognised as a right-of-use asset with a corresponding lease liability on the balance sheet — the old operating-lease-as-expense treatment for lessees no longer applies.

What's the key judgment area in lease liability measurement?

The discount rate used — the incremental borrowing rate, if the rate implicit in the lease isn't readily determinable — and the lease term assessment, including renewal or termination options reasonably certain to be exercised. Both materially affect the liability amount.

How does this tie to finance cost?

The lease liability unwinds through interest expense each period, which should appear within finance costs. A lease liability with no corresponding interest charge is a sign it isn't being measured under the effective interest method.

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