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Lessee accounting – ACCA (SBR) lectures

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Comments

  1. alinaeem123 says

    May 4, 2023 at 5:25 am

    ****Dr Depreciation
    ****Cr Accumulated Depreciation

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  2. malaks says

    August 21, 2021 at 9:11 pm

    Dear Sir
    Can u please advise what is the subsequent double entry for lesse?

    Dr depreciation
    Cr ?

    Dr interest
    Cr?

    Thanks in advance

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    • Ninocka says

      October 10, 2021 at 1:37 pm

      Hiya,

      I believe the double entry in the SPL is:

      Dr Depreciation
      Cr Right of use asset

      Dr Financing Cost (Interest)
      Cr Lease Liability

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      • alinaeem123 says

        May 4, 2023 at 5:25 am

        ****Dr Depreciation
        ****Cr Accumulated Depreciation

      • lasid says

        December 4, 2024 at 11:21 am

        For liability :

        Subsequently we:

        Dr, Finance cost (in P/L) and Cr, Lease liability (increasing lease liability)

        Dr, Financing cost, Cr, cash (decreasing lease liability)

  3. Zura says

    January 24, 2021 at 5:59 pm

    It is very particular explanation, thank you.

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  4. nhatminh2810 says

    July 6, 2020 at 8:12 am

    Hi sir, I have a question:

    For example:

    Instalment 10000
    rate 5%
    term 5 yrs
    paid in arrea
    OB Interest Instalment CB discount at CB
    1 43,295 2,165 10,000 35,460
    2 35,460 1,773 10,000 27,232 9,524
    3 27,232 1,362 10,000 18,594 9,070
    4 18,594 930 10,000 9,524 8,638
    5 9,524 476 10,000 – 8,227

    method 1:
    CL 8,227
    NCL 27,232

    method 2:
    CL 9,524
    NCL 25,936

    Can you tell me which method resulting in correct treatment of current and non current lease liability. I know that the method 1 is prescribed by the book but it seems very unreal, especially with long term lease, where the current portion is very small compared to the non current component. While in method 2, the cashflow from the year end onwards is discounted to year end, and the current part is the cash paid in next year discounted to current year end, seems more appropriate?

    Thanks.

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  5. shah369 says

    May 29, 2020 at 6:59 pm

    Hi, how did you get 3.546 AF?

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    • MichaelReidy says

      June 5, 2020 at 7:37 pm

      Annuity Tables

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    • kanyinsolaonafuye says

      June 28, 2020 at 2:10 pm

      you can also use this formula (1-(1+r)^-n)/n

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      • kanyinsolaonafuye says

        June 28, 2020 at 2:12 pm

        sorry (1-(1+r)^-n)/r

  6. tommyboy0928 says

    May 5, 2019 at 2:26 pm

    I’m having the same question

    Shouldn’t we deduct the initial payment of $5,000 from the initial present value of lease payment of $22,730?

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  7. nidhi27 says

    February 7, 2019 at 1:51 pm

    Hello,

    the value of the right of use asset is stated in the BPP book as the PV of the lease payments not paid at commencement date + payments made before the commencement date+ direct costs. In the above example, do we assume that the minimum lease payments of $22730 includes the first payment of $5000. I’m a little unsure about the treatment of the same to find out the value of the right of use of asset.

    Thank you,
    Nidhi

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    • nidhi27 says

      February 7, 2019 at 2:05 pm

      I’m sorry I re-read the text.

      the corrected question is, the BPP text adds on the initial payment to the right of use asset value and does not subtract the initial cash paid in the lease liability computation. Just wondering if the difference in accounting treatment is correct or not.

      Thanks,
      Nidhi

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    • ajithsk says

      March 19, 2020 at 4:26 pm

      Ya,i too havd same confution ..think BPP example is the correct way snd this example presentation form shall ignore..

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      • ajithsk says

        March 19, 2020 at 4:32 pm

        Further presentation form confusssed becaused here stated gross then deducted but BPP example start with net figure as exactly match the wordinv of ‘the lease lisbility is initially measured at the present value ov lease payments not paid at the commencement date’

      • ton1031 says

        May 15, 2020 at 6:43 am

        The ? does not say there is an initial/commencement payment of $5,000 plus 5 payments of $5,000 each. Five payments are required and the first payment starts now 1-1-2015. The $22,730 PV given includes the now required $5,000 and the other 4 payments of $5,000 each. As such, the R of U Asset & Lease Liability do agree at the start of the day (1-1-2015) at $22,730 before the first payment of $5,000 is due and paid at the end of the same day (1-1-2015). This, then, lines up with BPP. Hope this helps.

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