TOPIC 4 IFRS 16 LEASES
|
|
- Damon Benson
- 5 years ago
- Views:
Transcription
1 TOPIC 4 IFRS 16 LEASES The user of a leased asset is the lessee and the supplier/owner of the leased asset is the lessor What is a lease? A contract, or part of a contract, that conveys the right to use an asset, the underlying asset, for a period of time in exchange for consideration What is an underlying asset? An asset that is the subject of a lease, for which the right to use that asset has been provided by a lessor to a lessee. What is a Right of Use asset? An asset that represents a lessee s right to use an underlying asset for the lease term. IFRS 16 was brought in to remedy the non recognition of liabilities for assets held under operating leases. For lessees, IFRS 16 removes the distinction between finance and operating leases which was a feature of IAS 17. 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. Right to Control the use of an asset is dependent on D: Direction over how and for what purpose the asset is used is a right that the lessee has E: Economic benefits from use of the identified asset will flow to the lessee A lessee does not control the use of an identified asset if the lessor can substitute the underlying asset for another asset during the lease term and would benefit economically from doing so. Accounting Treatment where a Contract contains a lease 1. At commencement date, measure the right of use asset at cost ( Cr Lease Liability (SOFP), Dr Right of Use Asset (SOFP). Note: Cost comprises amount of the initial measurement of the lease liability, any lease payments made before the commencement date less any lease incentives received, any initial direct costs incurred by the lessee, any costs which the lessee will incur for dismantling and removing the underlying asset or restoring the site at the end of the lease term 2. At commencement date, measure the lease liability at the present value of future lease payments, including any expected payments at the end of the lease.( Cr Lease Liability ((SOFP), Dr Right of Use Asset (SOFP)) 1
2 3. Subsequent measurement of the right of use asset: The right of use asset should be depreciated from the commencement date to the earlier of the end of the useful life of the underlying asset and the end of the lease term (Dr SOPL Depreciation Expense, Cr Right of Use Asset (SOFP) Note: 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 exercise, then the right of use asset should be depreciated over the useful life of the underlying asset. Note: If the right of use asset is an investment property or belongs to a class of assets to which the revaluation model applies, then apply the revaluation model as per IAS 40 and IAS Subsequent measurement of Lease Liability: The carrying amount of the lease liability is increased by interest charges on the outstanding liability (Dr SOPL - Finance Cost, Cr SOFP - ) and reduced by the lease payments made. (Cr SOFP Bank, Dr SOFP Lease Liability). Then split the closing lease liability between current and non current liabilities. Presentation in the Financial Statements Right of Use Assets to be presented on a separate line under Non Current Assets in the Statement of Financial Position Lease Liabilities to be presented separately in Liabilities. Best practice is that liabilities should be split between current and non current liabilities DEPOSITS PAID Where the lessee has paid a deposit to the lessor before the lease commences, the deposit is used to reduce the amount of the lease liablity i.e. reduce the amount of lease finance advanced deposits are deemed to be all capital The Double Entry for a deposit is Cr Bank X Dr Lease Liability X In questions, where the initial payment is different in amount to the annual rentals, this is generally taken to be an indicator of a deposit paid LEASE IN ARREARS Rental is paid on Last day Rentals are deemed to be composed of Interest and Capital No Interest Accrual 2
3 LEASE PAID IN ARREARS EXAMPLE Branch acquired an item of plant and equipment on a lease on 1 January 20X1. The terms of the agreement were as follows : Deposit Instalments 1,150 (non refundable) 4,000 per annum for 7 years payable in arrears Initial Measurement of Lease Liability 20,000 The underlying asset has a useful life of 4 years and the interest rate implicit in the lease is 11%. Required: Prepare extracts from the SOPL and SOFP for the year ending 31 December 20X1. 1. The right of use of the underlying asset should be capitalised and included as a non current asset. As the lease has a 4 year life, straight line depreciation for the year to 31 Dec x1 will be 25% of 20,000 = 5,000 Leasing Table - Lease Paid in Arrears (i.e. on Last Day of Period) Year Opening Lease Liability Interest 11% Lease Repayment Closing Lease Liability X1 1 18,850 2,074 (4,000) 16, X2 2 16,924 1,862 (4,000) 14, X3 3 14,786 1,626 (4,000) 12, X4 4 12,412 1,365 (4,000) 9, X5 5 9,777 1,075 (4,000) 6, X6 6 6, (4,000) 3, X7 7 3, (4,000) - SOPL Extract for Y/e X1 Finance Charge 2,074 Depreciation 5,000 Statement of Financial Position Extract as at X1 Assets Non Current Assets Right of Use Asset 15,000 3
4 Equity & Liabilities Non Current Liabilities Lease Liability 14,786 Current Liabilities Lease Liability (16,924-14,786) 2,138 LEASE IN ADVANCE Main Points Rental is paid on first day The first rental is deemed to be all capital, and as a result, an accrual will be made for finance costs in year 1 and thereafter. In Year 2, the amount of capital repaid will be the lease rental less accrued interest from Year 1 paid in Year 2 i.e. paid as part of Year 2 rental IFRS 16 Lease Paid In Advance Class Question & Answer A lease rental of 20 million was paid on 1 April It is the first of 5 annual payments in advance for the rental of an item of equipment that has a cash purchase price of 80 million. The auditors have calculated the implicit rate in the lease as 12% per annum. The right of use is to be depreciated on a straight line basis over the life of the lease. (a) Show the effect on the SOPL and Statement of Financial Position for 31 March 2016 (b) Calculate the interest charge for the remaining years of the lease 4
5 Solution 1. The cash price of the leased plant of 80 million should be capitalised and included as plant and equipment. As the lease has a 5 year life, straight line depreciation for the year to 31 March 2016 will be 20% of 80 million = 16 million Leasing Table - Lease Paid in Advance (i.e. on First Day of Period) Year Opening Lease Liability Rental Remaining Lease Liability Interest Accrual (12%) ,000 (20,000) 60, ,000 (20,000) 47, ,200 (20,000) 32,864 3, ,864 (20,000) 16, ,808 (20,000) - - Notes: 1. First Rental is deemed to be all capital 2. Interest for each year is calculated on the Remaining Lease Liability 3. The Interest Accrual in the current year is paid from the Rental of the following year with the balance of the rental representing capital repayment SOPL Extract for Y/e Finance Charge 7,200 Depreciation 16,000 Statement of Financial Position Extract as at Assets Non Current Assets Right of Use Asset 64,000 Equity & Liabilities Non Current Liabilities Lease Liability 47,200 Current Liabilities Lease Liability ( ) 20,000 5
6 Recognition Exemptions A lessee may elect to account for lease payments as an expense on a straight line basis over the lease term for the following two types of leases 1. Short Term leases: where the lease term is 12 months or less. This election is made by class of underlying asset (i.e. election to be applied to all assets in a particular class) 2. Low Value Leases: Where the underlying asset (i.e. leased asset) has a low value when new. This election can be made on a lease by lease basis. Sale and leaseback transactions A sale and leaseback transaction involves the sale of an asset and the leasing back of the same asset. If the sale satisfies the IFRS 15 requirement to be accounted for as a sale: The lessee measures the right of use asset arising from the leaseback at the proportion of the previous carrying amount of the building that relates to the right of use retained. This is calculated as the carrying amount X (Present Value of Lease Payments/Fair Value of Asset when sold) The lessee only recognises the amount of any gain/loss on the sale that relates to the rights transferred to the buyer. Such gains/losses are taken directly to the SOPL. Where the sale proceeds exceed fair value, the excess is recognised as additional financing provided by the lessor. Journal for a Sale and Leaseback Transaction where a Lease is created Dr Bank (SOFP) X Dr Right of Use Asset (SOFP) X Cr Asset Sold (SOFP) Cr Lease Liability (SOFP) Cr Gain on Rights Transferred (SOPL) X X X Subsequently Account for Lease as Normal Depreciation of Right of Use asset, Interest, Capital Repaid, Split of Lease Liability between Current Liabilities and Non Current Liabilities 6
7 If the sale does not satisfy the IFRS 15 requirement to be accounted for as a sale: Seller continues to recognise the transferred asset and the transfer proceeds are treated as a financial liability, as per IFRS 9. The transaction is more in the nature of a secured loan. Sale and Leaseback Example Capital Co entered into a sale and leaseback on 1 April 20X7. It sold a lathe with a carrying amount of 300,000 for 400,000 (i.e. its fair value) and leased it back over a five year period, equivalent to its remaining useful life. The transaction constitutes a sale in accordance with IFRS 15. The lease provided for a five annual payments in arrears of $90,000. The rate of interest implicit in the lease is 5%. The present value of the lease payments is 389,652. What are the amount to be recognised in the financial statements at 31 March 20X8 in respect of this transaction? Solution Measure the Right of Use Asset: This is calculated as the carrying amount X (Present Value of Lease Payments/Fair Value of Asset when sold) 300,000 * ( / 400,000) = 292,239 The gain on the sale is 100,000 ( 400, ,000). Of this gain, the amount relating to the rights retained is: 100,000 * ( / 400,000) = 97,413. Therefore the balance of the gain on the rights transferred is taken directly to the SOPL 2,587 ( 100,000-97,413) Therefore, the initial posting can now be made as follows Dr Bank 400,000 Cr Lathe (Asset SOFP) 300,000 Dr Right of Use Asset 292,239 Cr Lease Liability 389,652 Cr Gain on Transfer 2,587 Being Initial posting of Right of Use Asset, Lease Liability and Gain on Rights transferred. Depreciate the Right of Use Asset over 5 years as follows 292,239/5years = 58,448 Cr Right of Use Asset (SOFP) 58,448 Dr SOPL Depreciation Expense 58,448 Being Depreciation Expense for Year Ended 31-3-X8 Account for Lease Liability paid in Arrears as follows 7
8 Date Opening Lease Liability Interest 5% Lease Rental Closing Lease Liability 31.3.X8 389,652 19,483 (90,000) 319, X9 319,135 15,957 (90,000) 245,092 Dr SOPL Finance Cost 19,483 Cr Lease Liability 19,483 Being Finance Cost for Year Ended 31-3-X8 Cr Bank 90,000 Dr Lease Liability 90,000 Being Lease Rental paid on 31-3-X8 Cr Lease Liability Non Current Liabilities 245,092 Dr Lease Liability Current Liabilities 245,092 Being Maturity Analysis of Lease Liability Balance at 31-3-X8 Financial Statement Extracts Statement of Profit or Loss for Year Ended 31-3-X8 Depreciation Expense (58,448) Finance Cost (19,483) Gain on Rights Transfer 2,587 Statement of Financial Position as at 31-3-X8 Assets Non Current Assets Right of Use Asset ( 292,239-58,448) 233,791 Non Current Liabilities Lease Liability 245,092 Current Liabilities Lease Liability 74,043 8
9 SUM OF THE DIGITS METHOD OF ALLOCATING INTEREST ON A LEASE An means of allocating the Finance Charge over the term of a lease Approximates to the actuarial method More interest expensed in the early part of the lease and less towards the end Procedure The digit 1 is assigned to the final instalment, 2 to the penultimate instalment and so on (This applies for a Lease in Arrears. For a Lease paid in Advance, the Digit 0 is applied to the Final Instalment ) Add the digits Calculate the interest charge included in each instalment by taking the total finance cost and multiplying by the following fraction Example of Sum of the Digits Method Digit Applicable to the Instalment Sum of the Digits Burrow Ltd. Acquired a new machine from Lydon Finance Co. Ltd on a lease. Burrow Ltd has the right to use the leased asset for the lease term. The lease terms are: Primary Period of Lease 4 Years Frequency of Lease Payments Annually, in Arrears Amount of Each Rental 5,000 Cash Price 15,850 Estimated Useful Life of Asset 4 Years Account for the above lease using the sum of the Digits as a means of allocating the finance charge 9
10 Solution Finance Cost Allocation Total Finance Expense (5000) * 4 15,850 = 4150 Instalment Digit Finance Expense Allocation 1 4 4/10 * 4150 = /10 * 4150 = /10 * 4150 = /10 * 4150 = Lease (In Arrears)Table Date Opening Capital Obligation Interest Rental Closing Capital Obligation Yr 1 15, ,510 Yr 2 12, ,755 Yr ,585 Yr Statement of Profit or Loss Extract for the Year End Yr 1 Finance Cost 1,660 Depreciation (15,850/4) 3,963 Statement of Financial Position Extracts As at 31/12/Yr 1 Assets Non Current Right of Use Asset (15,850 3,963) 11,887 Non Current Liabilities Lease Obligation
11 Current Liabilities Lease Obligation ( )
12 LESSOR ACCOUNTING Note that lessor accounting is largely unchanged under IFRS 16 from the previous leasing standard, IAS 17. As a result, for lessor accounting, IFRS 16 retains the IAS 17 distinction between finance leases and operating leases. Finance Lease: In substance, the risks and rewards are transferred to the lessee Operating Lease: In substance, the risks and rewards remain with the lessor. Finance Lease - Accounting Treatment - Lessor SOFP No Asset Recognise net investment in lease PVMLP + unguaranteed RV (i.e. Lease Receivable). SOPL Constant finance income.no depreciation expense Operating Lease Accounting Treatment Lessor SOFP Asset is Retained in books of lessor.depreciated over UL SOPL Rental income credited on a straight line basis over the lease term to the P/L depreciation expense 12
13 Past Exam Questions CPA P1 Past Exam Questions CPA P2 Q3 (1) April 2017, Q2 August 2016, Q3 (7) August 2016, Q3 (3) Apr 14 Q (B) (i) April 2017, Q1 August 2016, Q (A) April 2016,Q (A) April & August 2015 Q5 Apr 13 Q1 August 2014 Q4 Aug 11 Q (A) April 2014 Q3 Apr 11 Q (B) Aug 13 Q (a) Aug 12 Q1 Aug 11 Issue 8 Q3 Apr 11 Q1 Apr 11 note (vi) 13
WHY DO WE NEED TO APPLY SUBSTANCE TO A LEASE?
IAS 17 LEASES IAS 17, Leases takes the concept of substance over form and applies it to the specific accounting area of leases. When applying this concept, it is often deemed necessary to account for the
More informationIFRS 16 LEASES. Page 1 of 21
IFRS 16 LEASES OBJECTIVE The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. This information gives a basis for users
More informationIFRS 16 Leases. Presented by Anton van Wyk M. Com CA (SA)
IFRS 16 Leases Presented by Anton van Wyk M. Com CA (SA) Why a new IFRS for leases? Information reported about operating leases lacked transparency and did not meet the needs of users of financial statements
More informationInternational Financial Reporting Standards (IFRS)
FACT SHEET February 2011 IAS 17 Leases (This fact sheet is based on the standard as at 1 January 2011.) Important note: This fact sheet is based on the requirements of the International Financial Reporting
More informationInternational Financial Reporting Standard 16 Leases. Objective. Scope. Recognition exemptions (paragraphs B3 B8) IFRS 16
International Financial Reporting Standard 16 Leases Objective 1 This Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure
More informationIn December 2003 the Board issued a revised IAS 17 as part of its initial agenda of technical projects.
IFRS 16 Leases In April 2001 the International Accounting Standards Board (the Board) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards Committee (IASC)
More informationACCA Paper F7. Financial Reporting (INT) theexpgroup.com
Thank you for downloading this extract from our ExPedite notes to accompany your free online Course in a Coffee Break. To download a free complete set of our ExPress notes please visit www.. Good luck
More informationIn December 2003 the IASB issued a revised IAS 17 as part of its initial agenda of technical projects.
IFRS Standard 16 Leases In April 2001 the International Accounting Standards Board (IASB) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards Committee (IASC)
More informationSummary of IFRS Exposure Draft Leases
The International Accounting Standards Board (IASB) recently issued a revised exposure draft (ED) relating to leases. Once these proposals are finalized the new guidance will replace the IAS 17 Leases.
More informationThe new IFRS 16 Leases effective as of 1 January 2019
The new IFRS 16 Leases effective as of 1 January 2019 IFRS 16 was issued by IASB on 13 January 2016. The Standard is effective as of 1 January 2019. It has not yet been adopted by the EC. This is a Standard
More informationInternational Accounting Standard 17 Leases. Objective. Scope. Definitions IAS 17
International Accounting Standard 17 Leases Objective 1 The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in relation
More informationSri Lanka Accounting Standard - SLFRS 16. Leases
Sri Lanka Accounting Standard - SLFRS 16 Leases CONTENTS from paragraph SRI LANKA ACCOUNTING STANDARD - SLFRS 16 LEASES INTRODUCTION OBJECTIVE 1 SCOPE 3 RECOGNITION EXEMPTIONS 5 IDENTIFYING A LEASE 9 Separating
More informationA Review of IFRS 16 Leases By Tan Liong Tong
A Review of IFRS 16 Leases By Tan Liong Tong In April 2016, the MASB issued MFRS 16 Leases that is identical to IFRS 16 Leases issued by the IASB in January 2016. The effective date of this new MFRS is
More informationNew Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16)
New Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16) Issued February 2016 This Standard was issued on 11 February 2016 by the New Zealand Accounting Standards Board
More informationAccounting Standards for Enterprises No Leases No. 3 [2006] of the Ministry of Finance
Accounting Standards for Enterprises No. 21 - Leases No. 3 [2006] of the Ministry of Finance Chapter I General Provisions Article 1With a view to regulating the recognition and measurement of leases, as
More informationCA. Gopal Ji Agrawal
CA. Gopal Ji Agrawal 1. Scope 2. Key concepts 3. Accounting for leases 4. Other Lease Contracts 4. Disclosure 5. Appendix (s) 6. Questions October 1980 September 1982 IAS 17 Accounting for Leases Exposure
More informationExposure Draft. Indian Accounting Standard (Ind AS) 116 Leases. (Last date for Comments: August 31, 2017)
ED/Ind AS/2017/06 Exposure Draft Indian Accounting Standard (Ind AS) 116 Leases (Last date for Comments: August 31, 2017) Issued by Accounting Standards Board The Institute of Chartered Accountants of
More informationMiles CPA Review: FAR Updates
Miles CPA Review: FAR - 2019 Updates Summary of updates: - FAR-4.4: s [ASC 842] effective fiscal years beginning after Dec 15, 2018 (for issuers) and effective fiscal years beginning after Dec 15, 2019
More informationIFRS 16 Leases supplement
IFRS 16 Leases supplement Guide to annual financial statements IFRS December 2017 kpmg.com/ifrs Contents About this supplement 1 About IFRS 16 3 The Group s lease portfolio 6 Part I Modified retrospective
More informationIFRS 16: Leases; a New Era of Lease Accounting!
The journal is running a series of updates on IFRS, IAS, IFRIC and SIC. The updates mostly collected from different sources of IASB publication, seminars, workshop & IFRS website. This issue is based on
More informationSSAP 14 STATEMENT OF STANDARD ACCOUNTING PRACTICE 14 LEASES
SSAP 14 STATEMENT OF STANDARD ACCOUNTING PRACTICE 14 LEASES (Issued October 1987; revised February 2000) The standards, which have been set in bold italic type, should be read in the context of the background
More informationHKAS 17 Leases 1 October 2005
HKAS 17 Leases 1 October 2005 1. Objective of HKAS 17 The objective of Hong Kong Accounting Standard (HKAS) 17 Leases is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure
More informationGearing up for change New IFRS on Leases
Gearing up for change New IFRS on Leases In a nutshell The changes Lessee accounting Effective date: 1 January 2019 Limited changes to scope of IAS 17 Enhanced guidance on identifying a lease Lessor accounting
More informationLeases. (a) the lease transfers ownership of the asset to the lessee by the end of the lease term.
Leases 1.1. Classification of leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease
More informationInternational GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 16)
International GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 16) Appendix 1: Early application of IFRS 16 Leases Introduction This Appendix
More information2) All long-term leases should be capitalized in the accounts by the lessee.
Chapter 18 Leases 1) The principal attribute of finance leases is that the risks and rewards of asset ownership are deemed to remain with the lessor. LO: 18-02 List the criteria for classification of a
More informationExample 1: Separating lease/non-lease elements
List of Examples N. Title Example 1 Example 2 Example 3 Example 4 Example 5 Example 6 Example 7 Example 8 Example 9 Example 1 Example 11 Example 12 Example 13 Example 14 Separating the lease element from
More informationLKAS 17 Sri Lanka Accounting Standard LKAS 17
Sri Lanka Accounting Standard LKAS 17 Leases CONTENTS SRI LANKA ACCOUNTING STANDARD LKAS 17 LEASES paragraphs OBJECTIVE 1 SCOPE 2 DEFINITIONS 4 CLASSIFICATION OF LEASES 7 LEASES IN THE FINANCIAL STATEMENTS
More informationThere are two main reasons why leases may need to be reclassified under the Code.
4.2 Leases and Lease Type Arrangements A - Reclassification of Leases The requirements of the Code in respect of lease classification are different to those of the SORP. Authorities will therefore need
More informationExposure Draft 64 January 2018 Comments due: June 30, Proposed International Public Sector Accounting Standard. Leases
Exposure Draft 64 January 2018 Comments due: June 30, 2018 Proposed International Public Sector Accounting Standard Leases This document was developed and approved by the International Public Sector Accounting
More informationTOPIC 2 - IAS 40 INVESTMENT PROPERTY
TOPIC 2 - IAS 40 INVESTMENT PROPERTY Definitions: Investment Property: Property held to earn rentals or for capital appreciation or both. An entity may own land or a building as an investment rather than
More informationPrepare Financial Statements & Maintain Asset and Inventory Records
Prepare Financial Statements & Maintain Asset and Inventory Records Gavin Dumbrell & Rex Walsh National Core Accounting Publications ISBN: 9781 921 579 042 Second Edition 2009 www.learnnowbiz.com Published
More informationHKFRS 16 Leases. Disclaimer. Date 21 April 2017 Time 19:00 21:00 Venue Boys' and Girls' Clubs Association
HKFRS 16 Leases Date 21 April 2017 Time 19:00 21:00 Venue Boys' and Girls' Clubs Association www.zhtraining.com Disclaimer The materials of this seminar are intended only to provide general information
More informationSLAS 19 (Revised 2000) Sri Lanka Accounting Standard SLAS 19 (Revised 2000) LEASES
Sri Lanka Accounting Standard SLAS 19 (Revised 2000) LEASES 265 Introduction This Standard (SLAS 19 (revised 2000) ) replaces Sri Lanka Accounting Standard SLAS 19, Accounting for Leases ( the original
More informationIn December 2003 the IASB issued a revised IAS 17 as part of its initial agenda of technical projects.
International Accounting Standard 17 Leases In April 2001 the International Accounting Standards Board (IASB) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards
More informationIASB Staff Paper March 2011
IASB Staff Paper March 2011 Effect of board redeliberations on Exposure Draft Leases About this staff paper This staff paper indicates how the proposals in the Exposure Draft Leases would change as a result
More informationGet ready for FRS 116: Leases
Get ready for FRS 116: Leases Chetan Hans & Eng Min Lor Grant Thornton Singapore Overview of main changes Replaces FRS 17 Leases, INT FRS 104 Determining whether an Arrangement contains a Lease, INT FRS
More informationUniversità degli studi di Pavia Facoltà di Economia a.a Lesson 8 International Accounting Lelio Bigogno, Stefano Santucci
Università degli studi di Pavia Facoltà di Economia a.a. 2013-2014 Lesson 8 International Accounting Lelio Bigogno, Stefano Santucci 1 IAS/IFRS: IAS17 Leasing 2 History of IAS17 October 1980 Exposure Draft
More informationAccounting for Leases in Public Sector (IPSAS 13 Leases)
TRAINING WORKSHOP ON APPLICATION OF IPSASs Accounting for Leases in Public Sector (IPSAS 13 Leases) By Yona Killagane NSSF COMMERCIAL COMPLEX MOROGORO 7thApril 2017 Objectives and Scope Objective: Prescribes
More informationHKFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure
HKFRS 16 Leases Introduction HKFRS 16 Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective of HKFRS 16 is to ensure that lessees and lessors
More informationLEASE ACCOUNTING UNDER IFRS 16 AND IAS 17 A COMPARATIVE APPROACH
78 LEASE ACCOUNTING UNDER IFRS 16 AND IAS 17 A COMPARATIVE APPROACH Lecturer PhD. Cristina Aurora BUNEA-BONTAȘ Constantin Brancoveanu University of Pitesti, Romania Email: bontasc@yahoo.com Abstract: In
More informationChapter 15 Leases 15-1
Chapter 15 Leases 1. Why Leasing sometimes makes more sense 2. The accounting issues in recording a lease transaction 3. The types of contractual provisions in lease 4. The lease classification: capital
More informationLeases (HKAS 17) 23 January 2007
s (HKAS 17) 23 January 2007 Nelson Lam 林智遠 MBA MSc BBA ACA CFA CPA(Aust) CPA(US) FCCA FCPA(Practising) 2005-07 Nelson 1 s Case Star Cruises Ltd. (2005) stated: The adoption of HKAS 17 requires the Group
More informationIFRS 16 : Lease accounting
IFRS 16 : Lease accounting Effective for accounting periods beginning on or after 1 January 2019 December 2017 IFRS 16: Lease accounting The IASB published the new IFRS 16 lease standard, in order to avoid
More informationIAS 16 Property, Plant and Equipment. Uphold public interest
IAS 16 Property, Plant and Equipment Uphold public interest Background IAS 16 became operational in 1983 Major amendments have been made several times including 1998, 2003, 2008, 2012, 2013, 2014 The objective
More informationSri Lanka Accounting Standard-LKAS 17. Leases
Sri Lanka Accounting Standard-LKAS 17 Leases -516- Sri Lanka Accounting Standard-LKAS 17 Leases Sri Lanka Accounting Standard LKAS 17 Leases is set out in paragraphs 1 69. All the paragraphs have equal
More informationSection 12 Accounting for Leases Accounting by the Lessor and Lessee
Section 12 Accounting for Leases Accounting by the Lessor and Lessee 15-1 A lease is an agreement in which the lessor conveys the right to use property, plant, or equipment, usually for a stated period
More informationIntangible Assets IAS 38, IAS 36, IFRS 3
Intangible Assets IAS 38, IAS 36, IFRS 3 Agenda 1. Introduction 2. Recognition 3. Measurement 4. Impairment of intangible assets (IAS 36) Basic concept Cash-Generating Units 5. Disclosures 2 1 Introduction
More information[TO BE PUBLLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
[TO BE PUBLLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 30 th March, 2019 G.S.R. (E).
More informationCPA COMPETENCY MAP STUDY NOTES UPDATE TO DECEMBER 31, 2018
CPA COMPETENCY MAP STUDY NOTES UPDATE TO DECEMBER 31, 2018 Please note that several of the updates relate to changes that are not effective until 2019. For 2019 PEP Module Exams and for the CFE, you are
More informationTopic 14 IAS 18 - Revenue
Topic 14 IAS 18 - Revenue International Accounting Standard 18 (IAS 18) Scope of IAS 18 To prescribe the accounting treatment of revenue arising from: (a) (b) (c) (d) sale of goods; rendering of services;
More informationCHAPTER TWO Concepts and principles
CHAPTER TWO Concepts and principles 2.3 GOVERNMENT AND NON-GOVERNMENT GRANTS Recognition and presentation grants and contributions 2.3.2.8 Grants and contributions, including donated assets, shall not
More information2 This Standard shall be applied in accounting for all leases other than:
Indian Accounting Standard (Ind AS) 17 Leases (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main
More informationCNK & Associates, LLP
& Associates, LLP Accounting Standards vs Taxation - Revenue Recognition, Effect of Changes in Foreign Exchange Rates, Construction Contracts, Leases & Government Grants 8th July 2017 Gautam Nayak Himanshu
More informationIAS 17 - Leases. To receive regular updates kindly send test to : &
IAS 17 - Leases CA Rajkumar S Adukia B.Com (Hons), FCA, ACS, ACWA, LLB, DIPR, DLL &LP, IFRS(UK), MBA email id: rajkumarradukia@caaa.in Mob: 09820061049/09323061049 To receive regular updates kindly send
More informationLeases: Overview of the new guidance
Leases: Overview of the new guidance Prepared by: Richard Stuart, Partner, National Professional Standards Group, RSM US LLP richard.stuart@rsmus.com, +1 203 905 5027 March 2, 2016 Introduction On February
More informationOperating Leasing and IFRS 16
Operating Leasing and IFRS 16 How IFRS 16 affects lessees? How can simplifications benefit lessees? Why operating leasing remains attractive? How Autohellas Hertz can support you? Q&A Question Who is affected?
More informationLeases. Indian Accounting Standard (Ind AS) 17. Leases
Leases Indian Accounting Standard (Ind AS) 17 Leases Contents Paragraphs OBJECTIVE 1 SCOPE 2-3 DEFINITIONS 4-6 CLASSIFICATION OF LEASES 7-19 LEASES IN THE FINANCIAL STATEMENTS OF LESSEES 20-35 Finance
More informationHeadline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.
SHIPPING AND THE LAW 7^ Edition 25-26 October 2016 NAPLES Headline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.
More informationLease Accounting. Dr.T.P.Ghosh Professor, MDI, Gurgaon
Lease Accounting Dr.T.P.Ghosh Professor, MDI, Gurgaon Controversy Over Lease Classification and Accounting The basic concept of lease accounting is that some leases are merely rentals, whereas others are
More informationNew Zealand Equivalent to International Accounting Standard 17 Leases (NZ IAS 17)
New Zealand Equivalent to International Accounting Standard 17 Leases (NZ IAS 17) Issued November 2004 and incorporates amendments up to and including 30 June 2011 This Standard was issued by the Financial
More informationCPE regulations require online participants to take part in online questions
KPMG s CFO Financial Forum Webcast FASB/IASB Revised Lease Accounting Exposure Drafts A Detailed Look Part III: Lessor Accounting June 25, 2013 Administrative CPE regulations require online participants
More informationCenter for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members
Report April 19, 2017 Center for Plain English Accounting AICPA s National A&A Resource Center available exclusively to PCPS members Sale-Leaseback Transactions Involving Real Estate Navigating the Twists
More informationApplying IFRS in Financial Services
Applying IFRS in Financial Services IASB issues new leases standard - financial services April 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease
More informationLEASES WHERE ARE WE? Steve Rathjen
LEASES WHERE ARE WE? Steve Rathjen 267 256-3110 srathjen@kpmg.com Agenda Project status Lease definition and classification Lessee accounting Lessor accounting Presentation, disclosures, and transition
More informationDefining Issues May 2013, No
Defining Issues May 2013, No. 13-24 FASB and IASB Issue Revised Exposure Drafts on Lease Accounting The FASB and IASB (the Boards) recently issued revised joint exposure drafts (EDs) on proposed changes
More informationLeases (HKAS 17) June 2006
s (HKAS 17) June 2006 Nelson Lam CFA FCCA FCPA(Practising) MBA MSc BBA CPA(US) ACA 2005-06 Nelson 1 s Case Star Cruises Ltd. (2005) stated: The adoption of HKAS 17 requires the Group to classify the land
More informationNEED TO KNOW. Leases A Project Update
NEED TO KNOW Leases A Project Update 2 LEASES - A PROJECT UPDATE TABLE OF CONTENTS Introduction 3 Existing guidance and the rationale for change 4 The IASB/FASB project to date 5 The main proposals 6 Definition
More informationNew IFRS 15 & IFRS 16 standards The impact on M&A transactions. New IFRS 15 & IFRS 16 standards The impact on M&A transactions
New IFRS 15 & IFRS 16 standards The impact on M&A transactions 0 Contents Introduction 1 Executive summary 3 New revenue recognition standard IFRS 15 5 New lease standard IFRS 16 9 We can assist you in
More informationIFRS 15 and IFRS 16 Webinar
CPA Ireland Skillnet CPA Ireland Skillnet, is a training network that is funded by Skillnets, a state funded, enterprise led support body dedicated to the promotion and facilitation of training and up-skilling
More informationLease modifications. Accounting for changes to lease contracts IFRS 16. September kpmg.com/ifrs
Lease modifications Accounting for changes to lease contracts IFRS 16 September 2018 kpmg.com/ifrs Contents Contents Accounting for changes 1 1 At a glance 2 1.1 Key facts 2 1.2 Key impacts 3 2 Key concepts
More informationIn February 2016, FASB issued Accounting Standards. An Analysis of the New Sale and Leaseback Guidance. DEPARTMENTS I Accounting.
An Analysis of the New Sale and Leaseback Guidance By Josef Rashty In February 2016, FASB issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). Topic 842 will supersede the existing lease
More informationThis version includes amendments resulting from IFRSs issued up to 31 December 2008.
International Accounting Standard 17 Leases This version includes amendments resulting from IFRSs issued up to 31 December 2008. IAS 17 Leases was issued by the International Accounting Standards Committee
More informationAn intangible asset is an identifiable non-monetary asset without physical substance.
Technical Summary This extract has been prepared by IASC Foundation staff and has not been approved by the IASB. For the requirements reference must be made to International Financial Reporting Standards.
More informationGASBs Presented by: William Blend, CPA, CFE
GASBs 87-89 Presented by: William Blend, CPA, CFE Leases: Statement 87 Effective Date and General Implementation Effective for Florida fiscal year end 2021. Earlier application is encouraged. Leases should
More informationIFRS 16 Leases. A summary of IFRS 16 and its effects. 22 February 2017
IFRS 16 Leases A summary of IFRS 16 and its effects 22 February 2017 Overview of IFRS 16 Leases Leases will have a single accounting model for all leases with two exceptions ( low-value assets and short
More informationHKAS 17 Revised February 2014January Hong Kong Accounting Standard 17. Leases
HKAS 17 Revised February 2014January 2017 Hong Kong Accounting Standard 17 Leases HKAS 17 COPYRIGHT Copyright 2017 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting
More informationHKAS 17 Revised January 2017September Hong Kong Accounting Standard 17. Leases
HKAS 17 Revised January 2017September 2018 Hong Kong Accounting Standard 17 Leases HKAS 17 COPYRIGHT Copyright 2018 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting
More informationTeresa Gordon s Recommended Alternative to Accounting for Leases
Teresa Gordon s Recommended Alternative to Accounting for Leases Key features: Leases with title transfer and bargain purchase options would not be excluded from the scope. Leases with title transfer or
More informationTo download more slides, ebook, solutions and test bank, visit CHAPTER 21 ACCOUNTING FOR LEASES
CHAPTER 21 ACCOUNTING FOR LEASES IFRS questions are available at the end of this chapter. TRUE-FALSE Conceptual Answer No. Description T 1. Benefits of leasing. F 2. Accounting for long-term leases. F
More informationSomething Borrowed, Something New Get Ready for the New Lease Accounting Standard
April 2016 Something Borrowed, Something New Get Ready for the New Lease Accounting Standard By Scott G. Lehman, CPA, and David E. Wentzel, CPA Audit / Tax / Advisory / Risk / Performance Smart decisions.
More informationGASB 87 - Leases. South Carolina Association of CPAs Fall Fest November 16, 2018 Mauldin & Jenkins
November 16, 2018 Mauldin & Jenkins 800-277-0050 www.mjcpa.com GASB 87 - Leases Effective for periods beginning after December 15, 2019 - December 31, 2020 or June 30, 2021 or September 30, 2021 Amends
More informationBrad Bonde, CPA Senior Manager, HC Services/Audit & Advisory
Brad Bonde, CPA Senior Manager, HC Services/Audit & Advisory Overview Background Improving Lease Accounting Scope Accounting Models Disclosures Effective Dates 2 Background Source - FASB 3 QUIZ What amount
More informationPREVIEW OF CHAPTER 21-2
21-1 PREVIEW OF CHAPTER 21 21-2 Intermediate Accounting IFRS 2nd Edition Kieso, Weygandt, and Warfield 21 Accounting for Leases LEARNING OBJECTIVES After studying this chapter, you should be able to: 21-3
More informationChapter 5 Intercompany Transactions: Topic 2, Leases. Student Learning Outcomes. Chapter 5, Topic 2
Chapter 5 Intercompany Transactions: Topic 2, Leases Dr. Chula King Advanced Accounting The University of West Florida 1 Student Learning Outcomes Eliminate intercompany leases on the consolidated worksheet.
More informationCFA Level 1. Financial Reporting and Analysis. Non-current Liabilities
CFA Level 1 Financial Reporting and Analysis Non-current Liabilities 2011, Associate Professor Ole Sørensen, Ph.d. Side 1 Coupon Bonds Promises two types of payments: periodic interest payments and a lumpsum
More informationIFRS 16 Leases. PICPA IFRS: New Standards and Updates Dubai. 28 April 2017
IFRS 16 Leases PICPA IFRS: New Standards and Updates Dubai 28 April 2017 1 More transparent lease accounting IFRS 16 will bring most leases on-balance sheet from 2019. All companies that lease assets for
More informationPUBLIC BENEFIT ENTITY INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARD 13 LEASES (PBE IPSAS 13)
PUBLIC BENEFIT ENTITY INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARD 13 LEASES (PBE IPSAS 13) This Standard was issued on 11 September 2014 by the New Zealand Accounting Standards Board of the External
More informationReal estate leases. How will IFRS 16 impact real estate entities? May 2016
Real estate leases How will IFRS 16 impact real estate entities? May 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Identifying and separating
More informationIASB/FASB Exposure Draft on Leases. Accounting in the Retail Industry A new view of lease accounting emerges
IASB/FASB Exposure Draft on Leases Accounting in the Retail Industry A new view of lease accounting emerges Contents Introduction 1 Issue 1 Impact of capitalisation of all leases on financial statements
More informationLease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC
Lease & Finance Accountants Conference September 11-13 The Westin Charlotte Charlotte, NC H A N D O U T S Lessor Accounting under ASC 842 EQUIPMENT LEASING AND FINANCE ASSOCIATION Presenters Rod Hurd Chief
More informationNew Zealand Equivalent to International Accounting Standard 17 Leases (NZ IAS 17)
New Zealand Equivalent to International Accounting Standard 17 Leases (NZ IAS 17) Issued November 2004 and incorporates amendments to 31 December 2016 This Standard was issued by the New Zealand Accounting
More informationACCOUNTING STANDARDS BOARD STANDARD OF GENERALLY RECOGNISED ACCOUNTING PRACTICE LEASES (GRAP 13)
GRAP 13 ACCOUNTING STANDARDS BOARD STANDARD OF GENERALLY RECOGNISED ACCOUNTING PRACTICE LEASES (GRAP 13) Acknowledgement This Standard of Generally Recognised Accounting Practice (GRAP) is drawn primarily
More informationIFRS Update Guy Thomas, CPA, CA
IFRS Update Guy Thomas, CPA, CA D&Co IFRS update Agenda 3 new standards under IFRS IFRS 9 Financial Instruments IFRS 15 Revenue from Contracts with Customers IFRS 16 Leases Agenda Some narrow scope amendments
More informationNew IASB leases standard engineering and construction
Applying IFRS New IASB leases standard engineering and construction October 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Arrangements
More informationThis article is relevant to the Diploma in International Financial Reporting and ACCA Qualification Papers F7 and P2
REVENUE RECOGNITION This article is relevant to the Diploma in International Financial Reporting and ACCA Qualification Papers F7 and P2 For almost all entities other than financial institutions, revenue
More informationIFRS Project Insights Leases
IFRS Project Insights Leases The IASB and FASB ( the Boards ) published a Discussion Paper (DP) setting out a proposed lessee accounting model in March 2009. The proposed accounting model has evolved since
More informationWhy IFRS 16 matters to the shipping industry
www.pwc.no Why IFRS 16 matters to the shipping industry October 2017 Executive summary New lease standard to be effective 1 January 2019. Early implementation permitted together with IFRS 15 (effective
More informationAuditing PP&E, Including Leases
Auditing PP&E, Including Leases Learning Objectives Discuss typical audit risks and special considerations. Tailor an audit plan to assessed audit risk. Explain key controls related to PP&E. Describe lease
More informationThe joint leases project change is coming
No. 2010-4 18 June 2010 Technical Line Technical guidance on standards and practice issues The joint leases project change is coming What you need to know The proposed changes to the accounting for leases
More information