ias 12 12/2005

1. Panel is leasing under a finance lease over 5yrs period. The asset was recorded at the PV of the min lease payments of $12. Which starts 1/11/2004 straight line basis for 5yrs with no residual value.

The annual lease payments of $3m in arrears, interest 8% PA. The directors has not leased an asset under Fin Lease before and is unsure.

Solution:

Asset
NPV of future lease payments at inception of lease $12
Less Dep $(2.4)
CV $9.60

Less fin lease liability
Interest 8% *12 0.96
Lease rental (3.00)
Liability at inception of lease 12
(9.96)
0.36
DT is 30% * 0.36= 108,000

above is year 1, if it asks to calculate for year 2, I am not sure if I have done it right below:

Asset
NPV lease 9.60
Dep (2.4)
CV 7.2

Less fin lease liability
Interest 8% * 9.6 0.77
Lease rental (3)
Liability at inception 9.6
7.37
0.16

DT = 30% * 0.16= $48000

2. and do we DR deferred tax asset 48k
CR P/L tax £48k??

3.On 30/6/2001, the complex grp acquired a new sub. At the date of acquisition the subs had inventory that was shown in the f/s at carrying amount $50000. The grp assessed the fair amount of the inventory at $55000. tax 30%

so $5000 has not been taxed, therefore 30%*5000= $1500

do we CR deferred tax liability $1500
DR cost of sales $1500?