Dear Sir / Madam,
It is stated that Robster Co entered 5 new leases of land and buildings. The leases have been capitalized. Assets being 3.6 Million and finance Lease payable being 3.2 Million.
My query is
At the Beginning of Lease, The Asset and Liability are measured at LOWER OF
1) Fair Value
2) PV Of minimum Lease Payment.
Then how come they would be different as to asset figure ( 3.6 M) and Liability figure 3.2 Million.
ACCA Answers also do not have any mention of this. Kindly help.
Deep