Answered: s it say on the IFRS that Leases (for…

s it say on the IFRS that Leases (for Lessees) can be recorded at Fair Value on Commencement Date? I don't recall being taught th

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

Does it say on the IFRS that Leases (for Lessees) can be recorded at Fair Value on Commencement Date? I don't recall being taught this.

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How has IFRS 16 changed for lessees and lessors in relation to distinguishing between the two types of leases?
Under ASC 842 If the present value of the lease payments is less than or equal to the fair value of the asset the lessor must classify the lease as a direct financing lease. True False
“When accounting for leases, standard setters prefer to overlook legal form in favour of economic substance.” Critically discuss this statement in light of the requirements of IFRS 16 Leases, and explain why the standard setters considered accounting for leases to be an area in need of standardization and discuss the rationale behind the approach adopted in IFRS 16.
What was the major change in accounting for leases introduced by new accounting standard AASB16/IFRS16? Why was such a change launched by the professional standard setting bodies to abandon AASB117/IAS17?
For a depreciable asset, the amount of depreciation recognised shall be in accordance with AASB 116. The asset shall be: a fully depreciated over the shorter of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term. b fully depreciated over the shorter of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term. c fully depreciated over the longer of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term. d fully depreciated over the longer of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term.
In a finance lease by the lessee, the leased asset is depreciated on a systematic basis consistent with the depreciation policy of the lessee. If the the lease is only for a short term and of low value, and the lease contract did not mention as to the classification of such lease nor did it contain transfer of ownership and a reasonable certainty as to the purchase option's exercisability, depreciation by the lessee is a. Based on the useful life of the leased asset. b. Based on the lease term. c. Based on the shorter of the lease term or the useful life of the asset. d. Not recognized since the lease is an operating lease and the depreciation expense shall be shouldered by the lessor who retains ownership of the leased asset.
Unless otherwise stated in the security agreement, if a debtor sells, exchanges or disposes of the collateral subject to a security agreement, the secured party_____have the right to receive the proceeds of the sale. Group of answer choices does not does
24. One of the following statements is false: * a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller- lessee in a sales and leaseback transaction is not recognized.
49
In accounting for lease contracts, companies reporting under U.S. GAAP are required to treat the cash payments as "rent expense" if the contract is for 24 months or less. O do not need to capitalize the leased right-to-use asset if the contract is deemed immaterial. O have the discretion to classify the cash payments as "rent expense". O have to disclose every detail of the contract in the footnotes to the financial statements.
Describe reporting issues related to leases,postretirement benefits, and deferred taxes.
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