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Hi Chris,
With IFRS 16 requireing lesses to recognise all leased assets in the face of the SFP, and without a change in the lessor´s accounting, does this mean operatin lease assets will appear on both sides SFP´s? 2 companies will have the same asset in their SFP.
I understand that the lessee will only recognise the right of use value.
Hi,
In lessee accounting there is no such thing as an operating lease, so try not to use this phrase in the exam. We recognise all leases in the accounts unless it is a short lease (<12 months) or of small value.
To answer your question there is the chance that the lessee could recognise the lease in its accounts and the lessor recognise the lease as an operating lease as the risks and rewards have not been transferred to the lessee but I’d have though that this will be very rare.
Thanks
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