Flashcards
IFRS16 Leases
Cards in this deck (15)
- 1What is right-to-use of asset?A right-of-use asset 'represents the lessee's rights to use an underlying
asset for the lease term.' - 2Explain lease contract.A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration - 3When the lessee does not control asset?if the lessor can substitute the underlying asset for
another asset during the lease term and would benefit economically from doing so. - 4When the right to use the asset arise?The customer has the right to direct how and for what purpose the asset is used during the
whole of its period of use, or
(ii) The relevant decisions about use are pre-determined and the customer can operate the asset without the supplier having the right to change those operating instructions. - 5What does lease liability consist of 1 and 2(a) fixed payments, less any lease incentives
(b) variable lease payments that depend on an index or rate - 6What does lease liability consist of 3 and 4?(c) the exercise price of a purchase option if the lessee is reasonably certain to exercise that option
(d) payment of lease termination penalties if applicable - 7What does lease consist of?(a) the amount of the initial measurement of the lease liability, as described in paragraph 26;
(b) any lease payments made at or before the commencement date, less any
lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and
removing the underlying asset, - 8When discount rate is not easily determinable what should be used?Incremental borrowing rate
- 9How the rights-of-use asset is depreciated If the lease transfers ownership of the underlying asset at the end of the lease term or if the cost reflects a purchase option which the lessee is expected to exerciseover the useful life of the underlying asset.
- 10How the rights-of-use asset is depreciated If there is no transfer of ownership and no purchase option?from the commencement date to the earlier of the end of the useful life and the end of the lease term
- 11How lease liabilities can be presented?either presented separately from other liabilities or disclosed in the notes
- 12How rights-of-use asset should be presented?on a separate line under noncurrent
assets or they can be included in the total of corresponding underlying assets and disclosed in the notes. - 13How current and nc liability are calcualted when lease payments are made in advance?Then initial payment will be current liability, then c/f figure less cl=ncl
- 14How current and nc liability are calcualted when lease payments are made in arrears?Balance figure at the end of year 2 (or next year) will be NCL, and bal figure in year 1- year2=cl
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- ACCA FR (F7) Flashcards on IFRS16 Leases, created by Archimed Nemes on 29/04/2019.
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- Archimed Nemes
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