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Hello,
Is the opening balance of the lease liability is $250000 or 340000?
Should we add the first payment $90000 in the opening balance?Hello,
During the year ended 30 September 20X4 Hyper Co entered into the following transactions:
On 1 October 20X3, Hyper Co entered into a contract to obtain the right to use an asset for a five year period. The contract meets the definition of a lease under IFRS 16 Leases. An initial payment of $90,000 was made on commencement of the lease, being the first of five equal annual payments. The present value of the future lease payments on commencement of the lease was $250,000. The right-of-use asset has a five-year useful life. The lease has an implicit interest rate of 16%.
On 1 August 20X4, Hyper Co made a payment of $18,000 for a nine-month lease of an item of excavation equipment. Hyper wishes to utilise the exceptions available under IFRS
16 Leases.
What amount in total would be charged to Hyper Co’s statement of profit or loss for the year ended 30 September 20X4 in respect of the above transactions?