What kind of leases are exempted from being recognised?
- Short-term leases
- Low value leases
How is measured the lease liability? (components)
Fixed payments
+Certain variable payments
+Residual value guarantee
+Purchase/Termination Costs
-Previous payments
All components must be discounted using a rate.
What are fixed payments?
Fixed payments are payments set in contract less lease incentives receivable.
What is the residual value guarantee?
Is the incentive for lessee to maintain the asset in good condition.
It includes amounts lessee expects to make when asset returned.
What are the purchase and termination costs?
Are the amounts that a lessee expects to pay to either purchase an underlying asset or to terminate a lease by exercising an option
What types of variable payments are included in the initial measurement of the lease?
Included:
- Variable payment that depend on an index or a rate
- In-substance fixed payments
Not-included:
- Other variable payments: recognized in profit or loss
How is measured the right-of-use asset? (components)
Lease liability
+Initial Direct Costs
+Costs of removal
+Costs to restore
+Previous Payments
How is subsequently measured and accounted the lease liability? (components)
Initial value
+Interest on carrying value
-Lease payments
+Remeasurements
DR Right-of-use asset
CR Lease liability
When are leases remeasured? How to account for the remeasurement?
Remeasurement of a lease is required when:
- There is a reassessment of options (ie . they are not likely/unlikely to be exercised when the opposite was considered at initial recognition); or
- The actual lease contract is modified with the lessor.
Remeasurements are accounted for prospectively; no restatement of previous figures
Which are the measurement models for measure right-of-use asset?
- Cost model (IAS 16)
- Revaluation model (IAS 16)
- Fair value model Investment Property (IAS 40)
How is measured the right-of-use asset with the cost model? (components)
Initial cost
-Accumulated amortisation
-Accumulated impairment
+Remeasurements
How is measured the right-of-use asset with the Revaluation model? (components)
Fair value at revaluation date
-Accumulated amortisation
-Accumulated impairment
+Remeasurements
How is measure the right-of-use asset with the Fair Value model?
The Fair value model can be used to measured the right-of-use asset only if the propery being leased meet the definition of investment property.
- If the fair value model has been selected for invesment property: then apply the fair value model toany leased investment property as well
- If the fair value model has not been selected for investment property: apply the cost model to any leased investment property as well.
Is a contract with substitution rights for the supplier (lessor) a lease?
A contract with substantive substitution rights for the supplier is not a lease as the lessee has not obtained the economic benefits of the asset
A supplier’s right would be substantive if both of the following conditions are met
- The supplier has the practical ability to substitute alternative assets throughout the period of use
AND
- The supplier would benefit economically from the exercise of its right to substitute the asset
