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I have no idea to calculate the net for finance lease payable within 1 year, more than 1 year less than 5 years and more than 5 years (Lecture note pg 174). Anyone know it? Is it important????
Hi, yes it is important. We need to split the year end liability into current ( payable within 12 months ) and long term ( payable more than 12 months hence )
Can you calculate the year end liability? If you can do that, you should be able to calculate the liability at the end of next year!
The liability at the end of next year is this year’s long term liability.
The current liability is calculated as being the liability at the end of this year minus the liability at the end of next year.
All clear?
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