Recognition of ROUA
- the amount of initial meas of LL
2.Lease payments on or before the commencement date - Initial direct costs
- estimated costs of removing or dismantling
The lease term
lenth of lease term comprises:
- non-cancellable periods
- periods covered by the option to extend the lease if reasonably certain to exercise
- period by option to terminate if certain not to exercise
Subse measur-t
Dr finance cost Cr liability
Dr LL Cr Cash (decrease the carrying amount)
deprec-n is charged to shorter of lease term and useful life
if lesee measures inv properties in FV, then ROUA that are Inv Property shoudl also be on FV (ROUA that are subleased under operating lease -rental inc)
reassess LL
recalculated using revised discount rate if
1. the lease term changes
2. the entity’s assessmen of the option to repurchase changes
Lease disclosure
- depr charged on ROUA
- Interest expenses on lease liabilities
3.. the expense related to ST leases and lease of low value items - cash outflows for leased assets
5.Additions to ROUA - The carrying amount of ROUA
- MAturity analysis of LL
Finance vs operating lease
Fin is lease where substantially all risks and rewards of underlying asset transfer to the lessee
Fin lease
if one or more of following applie
1. the lesee has the option to purchase the asset for less than its expected FV at hte date of option becomes available and reasonably certain that it will be exercised
- the leas term is for the major part of economic life of the asset
- at inception PV of the lease payments is at least substantially equal to FV of the leased asset
- no alteration is possible - the leased assets are of specialiased nature than only lessee can use them without major modifications being made
- the lessee will compnesate lessor if the lease is cancelled
- gains or losses from fluctuations in the FV of the residual fall to lessee
- the lessee can continue the lease for secondary period n exchange for substantially lower than market rent
