I’m Neha Gupta, preparing for my CA Final exams and currently knee-deep in an articleship assignment involving Ind AS implementation for a client in the manufacturing sector. We’re grappling with Ind AS 116 (IFRS 16) – Leases, particularly around the use of practical expedients. Our client has a large volume of low-value and short-term leases. While we’ve opted for the practical expedient to not capitalize these, I’m finding the subsequent accounting for deferred tax implications quite tricky. Specifically, how do firms typically manage the deferred tax impact on the straight-lining of lease expenses for these specific non-capitalized leases, especially considering the different tax base treatment for income tax purposes vs. the Ind AS expense recognition? My concern is ensuring compliance with Ind AS 12 (Income Taxes) and avoiding future audit qualms, while also keeping the process efficient given the volume. Any insights on industry best practices or ICAI’s unwritten ‘expectations’ here would be greatly appreciated.