Chapter 19, Problem 1Q

Part 1: New Lease Accounting – IFRS 16 Leases Effect Analysis. What are the top three industries most affected by IFRS 16 as measured by the present value of future payments for off-balance-sheet leases to total assets? Which leased assets propel them to the top three?  Also, discuss the extent that smaller firms would be affected by IFRS 16. Which payments are to be included in the measurement of lease assets and lease liabilities? Also, discuss the pros and cons of excluding the following payments from the measurement. Variable lease payments linked to future use or sales Optional payments relating to lease-extension option when a lessee is not reasonably certain to exercise the option. Discuss the effects of the new accounting on the following items and ratios of lessees. Provide reason(s) behind all effects. EBITDA, operating profit, and profit before tax Operating cash flow, financing cash flow, and total cash flow Debt to equity, current ratio, and return on total assets

Match the words with the term.   Question 4 options:   one who pays to use an asset   agreed commitment   purchase   cancelable upon notice   one who lends an asset   1. lessee 2. sale and leaseback 3. financial lease 4. operating lease 5. lessor

Part 1: New Lease Accounting – using IFRS 16 Leases Effect Analysis.  Which payments are to be included in the measurement of lease assets and lease liabilities? Also, discuss the pros and cons of excluding the following payments from the measurement. - Variable lease payments linked to future use or sales - Optional payments relating to lease-extension option when a lessee is not reasonably certain to exercise the option.

Owefix a. compute the amount of lease receiveable for the leaseb. discusd the bethre of the leasec. prepara an amoritization table for the lessee and lessor

See attached picture   1. Duscuss the nature of this lease in relation to the lessor and compute the amount of each of the following items:  A. Lease receivable at inception of the lease  B. Sales Price  C. Cost of sales

The lessor expenses initial direct costs in the year of incurrence in a(n) direct-financing lease. sales-type lease. direct-financing lease and a sales-type lease. operating lease.

Define each of the following terms:b. Operating lease; financial lease; sale-and-leaseback; combination lease;synthetic lease; SPE

Listed below are 15 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. TERM 1. Interest expense 2. Disclosure only 3. Lessor's gross investment 4. Lessee's lease payments 5. Lessor's net investment 6. Initial direct costs 7. Operating lease 8. Bargain purchase option 9. Depreciable assets 10. Loss to lessee PHRASE Periodic rent payments plus excess guaranteed residual value. Deducted in lessor's computation of lease payments. Leasehold improvements. Cash paid to satisfy residual value guarantee. Sales-type lease selling expense. Depreciation longer than lease term. Sale-leaseback as operating lease. PV of lease payments plus PV of residual value. Future lease payments in each of the next five years. Periodic rent payments plus residual value. Lease payments plus guaranteed residual value. 11. Finance lease expense 12. PV of bargain purchase option price 13. Title transfers to lessee Nonlease payments. 14. Loan…

A lease agreement whereby the lessee recognized rent expense which is always equals to the rent income recognized by the lessor at a given period of time. A. Operating lease B. Finance lease C Terminating lease D. Sale type lease