IAS 17 Leases example 1

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  1. Avatar of zainy52 zainy52 says:
    October 18, 2012 at 9:54 am

    Hi Mike Little,
    In this Lease “example 1″ video, the depreciation is charged for 4 years but in the notes (answer pg. 218) it is charging depreciation for 5 years.
    Which one is to be correct?
    Thank you in advance

    • Avatar of MikeLittle MikeLittle says:
      October 18, 2012 at 11:04 am

      @zainy52, Hi

      I don’t have the notes available and I cannot face the prospect of listening to myself on the recording.

      The correct period is “over the shorter time of the lease term and the estimated useful life of the asset”

      Clearly I have made a mistake in either the recording or in the notes but hopefully this “explanation” should help you to determine which is the correct period over which the asset should be depreciated.

      Is that enough?

      ( and thank you for pointing out the inconsistency / error! )

  2. Avatar of pdoikova pdoikova says:
    June 1, 2012 at 11:29 pm

    Hi,
    in the cash flow statement you are saying we have 3000 under Financing activities. Here you mean the payment of the deposit and not the 1st repayment – am I correct?

  3. Avatar of Kieran Kieran says:
    May 30, 2012 at 6:18 pm

    i think what On Kei CHUNG is trying to say is in the downloadable answers, the useful life is still like this one 4 years. despite this, the depreciation is calculated dividing by 5, when in this video mike divides by 4. What is the correct method to do it? thanks in advance.

  4. Avatar of ngoteya80 ngoteya80 says:
    April 7, 2012 at 2:16 pm

    In example one why the prof use different years in his calculations, he started with 1.1.05 to 1.1.09 does him means 2005-2009?is there any meaning? because the qn shows that it is from jan 2010…

  5. Avatar of On Kei CHUNG On Kei CHUNG says:
    November 2, 2011 at 4:25 pm

    just want to check if the lease term on example 1 should be 5 years? (with 4 annual payment + deposit) as shown in the answer?

    • Avatar of peterb peterb says:
      November 5, 2011 at 6:28 pm

      The question says its 4 annual payments commencing 1Jan 2011. The deposit of 3000 on 1Jan 2010 is not part of the annual payments but reduces the amount ‘borrowed’ from 13161 to 10161.Therefore liability is actually 10161 and the payments of 3000 effectively start Jan 2011. I dont know if this makes sense to you. Am not sure, that is how I interpreted Question

  6. Avatar of igolo igolo says:
    October 27, 2011 at 11:42 pm

    why was d initial instalment of 3000 nt charged to d income stmt..

  7. Avatar of richwoman richwoman says:
    February 23, 2011 at 5:29 am

    sorry 1 had 43 fail i will attend lectures this time/ congrat to those who passed

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