• Skip to primary navigation
  • Skip to main content
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
    • BT
    • MA
    • FA
    • LW
    • PM
    • TX-UK
    • FR
    • AA
    • FM
    • SBL
    • SBR
    • AAA
    • AFM
    • APM
    • ATX
    • Dates
    • What is ACCA

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

ACCA F7 IAS 17 Leases Example 2

VIVA

ACCA F7 lectures聽聽Download F7 notes


Reader Interactions

Comments

  1. olyakosh says

    January 24, 2014 at 8:56 pm

    Dear Mr. Mike,
    Could you tell me, please, for the task with Giedruola, how have you calculated “Financial lease interest not yet accrued” for “Reconciliation of Obligations…with minimum lease payments”?

    Thank you in advance for answering my question.

    Olga

    Log in to Reply
  2. thandiwe says

    November 28, 2013 at 10:44 am

    i dont even know where to start from am so confused everything was flowing well until 3minutes into the video then you lost me,i dont understand where those figures are coming from, please help me

    Log in to Reply
    • MikeLittle says

      November 28, 2013 at 10:56 am

      I can only assume that you cannot see where the figures for interest come from. I suspect that you are not able to calculate 10% on an amount for HALF A YEAR.

      If that hasn’t resolved your difficulties, please post again

      Log in to Reply
      • thandiwe says

        November 28, 2013 at 3:24 pm

        i got confused for a minute but after watching the entire video i now understand where a the figures are coming from, thank you

      • MikeLittle says

        November 28, 2013 at 4:03 pm

        Ok, thanks for letting me know

  3. kurpatel says

    November 19, 2013 at 8:49 pm

    Thank you for a great lecture Mike. Could you please explain how the current liabilities and long term liability is calculated ? i am a bit confused about it, how come the log term liability is the remainder amount at the end of year 2 and current the difference between year 2 and year 1. what is the logic as we are preparing the financial statement as at the end of year 1 as per question? Thank you in advance

    Log in to Reply
    • MikeLittle says

      November 28, 2013 at 10:51 am

      That’s an easy one! We know the total liability (say 30,000) at the end of the year and that total amount is payable over the next (say) 5 years. But we need to know how much is payable within twelve months (current) and how much is payable in periods more than twelve months hence (deferred)

      If I calculate the amount outstanding at the end of NEXT year (say 23,000), then that figure represents the element of the current year’s total obligation (30,000) which will still be outstanding twelve months hence.

      Thus we can see that, of that 30,000, 23,000 will not be paid in the current year and is therefore deferred whereas our liability will fall by 7,000 (30,000 – 23,000) over the next twelve months and that must represent the current element of the 30,000

      OK?

      Log in to Reply
      • Accountaholic says

        January 26, 2014 at 8:20 pm

        @ MikeLittle:
        I got the logic behind calculating Current Liability. However can you please explain why we take the figure as at the end of the next year as NCL?

        Thanks

  4. babubamfo says

    November 7, 2013 at 9:07 am

    i want to understand leasing ias 17.can someone help me out.

    Log in to Reply
  5. absylum007 says

    November 6, 2013 at 8:55 pm

    i read the previous comments and like them i am confused too , how did you get TNCL (total non current liabilities ) and TCL(total current liabilities figure ) ????

    Log in to Reply
    • MikeLittle says

      November 7, 2013 at 3:23 pm

      Read my reply to Ahmer and see if that clears up the confusion

      Log in to Reply
  6. ahmer says

    September 21, 2013 at 1:54 am

    Dear Mike your answer should be that the current liability is 795+835= 1630 not 1712 because payments are on 01 / january not on 1 / july.and so on plz explain?

    Log in to Reply
    • MikeLittle says

      November 7, 2013 at 3:22 pm

      but how much interest RELATES to the accounting period? The payment on 1 July paid off the interest that had accrued for the period from 1 January up to 30 June. Interest then accrues from the period from 1 July up to 31 December – but that interest is not paid until “tomorrow” when we pay the next instalment on 1 January next year.

      Does that clear it up?

      Log in to Reply
  7. Mahoysam says

    September 17, 2013 at 6:51 pm

    Leases seemed so difficult at the beginning and I had no idea what’s going on O.o But then when I studied the chapter after watching the lecture I feel better about it!

    Thanks a lot!

    Log in to Reply
  8. sunnyenen says

    April 28, 2013 at 12:20 pm

    Hello, sir, I am a bit confused. Why cash change was not in the SoFP?

    Log in to Reply
  9. eadinnu says

    March 12, 2013 at 6:53 pm

    Sir,
    Thank you for the excellent lecture. However, I suggest that you help us to solve part two of the question for a simple reason. The logic used to determine the non current liability and the current liability seems to be different if the rentals are paid in advance. I have not been able to decode this logic. I came across it in Kaplan.

    Thank you in advance!

    Log in to Reply
    • MikeLittle says

      March 12, 2013 at 8:18 pm

      Hi

      It’s simple enough – just work out the dates and amounts of the payments to be made in the next ( say ) two years and you can then see how much is to be paid in the next twelve months and therefore how much is a long term debt

      Log in to Reply
      • eadinnu says

        April 5, 2013 at 12:58 pm

        Thanks

  10. loopheichuen says

    November 29, 2012 at 6:34 am

    May I know why we started from 2004? Question said they acquired the asset on 1 January 2009. I am so confused.

    Log in to Reply
    • Mahoysam says

      September 17, 2013 at 6:53 pm

      If you check the notes, you will find the correct year at the back . Maybe the lecture is recorded when the question had a different year or something, but the answers in the notes have the correct year anyways.

      Log in to Reply
  11. haidernchd says

    November 19, 2012 at 10:29 pm

    in Giedris, why we calculated the lease for two years while the questions asked to prepared the extracts for year ended 31-12-2009. the lease started on 01-01-2009. It should be only one years…..

    Log in to Reply
    • bajprincess says

      November 21, 2012 at 7:12 am

      @haidernchd, Hi… calculating for the 2yrs will assist with the determination of Current Liabilities reported at the end of the 1st yr…at least I found that it helped.

      Log in to Reply
      • MikeLittle says

        November 21, 2012 at 10:40 am

        @bajprincess, You’re absolutely correct. We need to subdivide the obligation to the lessor into current and long term and the easiest way is to progress the calculations up to the end of the accounting year following the year we are asked to consider

  12. ppatterson says

    November 11, 2012 at 8:50 pm

    In example two (Giedris) the estimated used life of the asset was nine (9) years however seven (7) years was used to calculate the depreciation. It was noted that seven (7) years was not mentioned in the question at any point. Why was the depreciation worked at seven (7) years.

    Log in to Reply
    • MikeLittle says

      November 11, 2012 at 9:47 pm

      @ppatterson, 14 half yearly instalments? depreciate over the lesser of useful life and lease term!

      Log in to Reply
  13. jehanhasan says

    November 8, 2012 at 9:58 pm

    or this is two different contracts, if different contracts then what about this question, how it is calculated , i am a little bit confused about it.

    Log in to Reply
    • MikeLittle says

      November 8, 2012 at 10:10 pm

      @jehanhasan, You could really do with a “picture” of the “obligations account” where you show the capital amount outstanding and show the dates when the capital amount is then changed by the interest calculated on that capital amount. Then show the payment of the installment and the date and that should then leave you with the capital amount outstanding for the next period until we again calculate the interest ….. and so on

      Log in to Reply
  14. jehanhasan says

    November 8, 2012 at 9:53 pm

    sir in example 1 the payment is in arears and in example two it is clearly written that the rental payment is on 1st january and 1 july but in your answer , you did write the payment of 1500 on 30 june and 31 december so my question is, if the payment date does n,t effect the calculation then why it is mentioned clearly in question ? kindly explain about it.
    kind regards

    Log in to Reply
    • MikeLittle says

      November 8, 2012 at 10:02 pm

      @jehanhasan, It DOES affect the calculation – the payment date determines the capital element outstanding at any point in time and it’s the capital element upon which the interest is calculated until the next installment date

      Log in to Reply
  15. ribberson says

    November 4, 2012 at 6:15 pm

    Where do you get the TNCA figure of 13714 from?
    Thanks

    Log in to Reply
    • MikeLittle says

      November 4, 2012 at 8:23 pm

      @ribberson, Cost less depreciation?

      Log in to Reply
  16. fzinyemba says

    October 26, 2012 at 12:18 pm

    dears Sir, Am I correct to think this question video was mixed on editing. At around 3 mins 5 secs the working figures appear to be suddenly totally different from the figures about 15 seconds before..i’m confused. Please view the video from 2min 45 sec to 3min 15 secs

    Log in to Reply
    • MikeLittle says

      October 26, 2012 at 1:10 pm

      @fzinyemba, Hi, no, it’s fine. The screen shots you refer to are the situation / schedule after two payments ( the earlier screen ) and then 2 instalments after that. If you look upwards from the second screen, you’ll find 15,295 higher up.

      It’s just that the second screen doesn’t show the 15,295 from the first screen

      Is that clear? I know what I’m trying to say but it seems to have come out a bit jumbled!

      Log in to Reply
      • fzinyemba says

        October 26, 2012 at 3:33 pm

        @MikeLittle,

        Thanks Mike,

        Now it makes sense to me.
        your lectures are brilliant

      • MikeLittle says

        October 26, 2012 at 8:21 pm

        @fzinyemba, 馃檪

  17. albertabediacca says

    September 25, 2012 at 3:12 pm

    there is something wrong with leasing i should think so cos i have played it twice and i don’t understand a thing. you still the best for me Mike so jus check it up

    Log in to Reply
  18. aardvark says

    September 22, 2012 at 8:01 pm

    Dear Sir

    Why have you started with 2004? The notes state that Giedris aquired asset on 1 January 2009 this I believe is the same for example 1
    Should it start with 2009 the year when the asset was aquired?

    Many thanks

    Log in to Reply
  19. rimisac says

    September 20, 2012 at 7:26 am

    I do not understand the answer to this question. I am completely confused,

    Log in to Reply
    • MikeLittle says

      September 20, 2012 at 10:27 am

      @rimisac, I’ll look at the question – possibly tomorrow, when I have a bit of time

      Log in to Reply
  20. zamina says

    September 17, 2012 at 10:04 am

    Sir, I don’t understand the answer to Giedruola that you said we do it ourselves especially extract of the SoFP where its written in the answer as follows:

    TNCA 13714
    C.L 1712
    LTL 11583
    Interest
    not yet
    accrued 665

    My question is why is it the same as Gieoris and that figure of 665, its confusing please if u can help.

    Zamina.

    Log in to Reply
Newer Comments »

Leave a Reply Cancel reply

You must be logged in to post a comment.

Copyright © 2025 路 Support 路 Contact 路 Advertising 路 OpenLicense 路 About 路 Sitemap 路 Comments 路 Log in