Leases – Introduction – ACCA Financial Reporting (FR)
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If you capitalise a right of use asset how do you get tax relief on it? – my understanding is you cant claim AIAs if you wont own the asset at the end of the day, but if its on the balance sheet it wont be deducted from taxable profits?
Does this treatment apply to operating leases that may be long term but will not belong to you at the end of the day?
I also had questions about it. But the standard says explicitly that for lessee single accounting is introduced. So no matter if you get the asset at the end of the day or not, if the contract contains lease and lease term is more than one period then right of use asset has to be recognised. And lease of only short term or low value assets can be expensed to P&L.
It would be nice to hear the opinion of tutor.
*lease term more than 12 months