Which of the following would not be included within the initial cost of a right?of?use asset? A Installation cost of the asset B Estimated cost of dismantling the asset at the end of the lease period C Payments made to the lessor before commencement of the lease D Total lease rentals payable under the lease agreement
It is a a bit of a trick but it is the present value of lease payments that is part of the ROU asset and not the total payments, hence the correct answer is D.
C is part of the ROU asset as this would include any deposits made at the start of the lease period.