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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › IFR16 audit work
Hello mike,
I would like to what audit procedures can I do in regards to new IFR16 16.
What are the accounting matters to consider regarding this standard?
Thanks
Accounting matters?
Correct treatment
Correct valuation and use of appropriate discount factor in calculations of present value
Correct satisfaction of criteria to be treated as lease
Correct sub-allocation between long-term and current liabilities
Appropriate and correct calculation of depreciation
Appropriate disclosure in notes to financial statements
Audit work?
Obtain copy of lease agreement and consider terms
Length of lease
Right of use
Fair value
Present value of lease payment + any guaranteed residual amount
Physical inspection
Review of board minutes
Review of relevant correspondence between lessor and client
Confirmation of cash payments (vouch to accounting records / bank statements)
How many marks? Is this enough? (Be honest … it’s common sense isn’t it?)