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Hello…
With regards to the assertion rights and obligations in relation to non-current assets:
Lets say a client acquired land or any other asset (aircraft etc.) through a lease, does that mean the client has a “right” over that asset and can include it in their SOFP?
Lets say a client acquired an asset by hire purchase, does that mean the client has a “right” over the asset and can include it in their SOFP?
Thanks!
If the lease or HP agreement is a finance lease, then the asset will be on the sofp. To be a finance lease, the risks and benefits of ownership have to be transferred, the length of the lease must be similar to the life of the asset and the payments must total to close to the fair value of the asset. More of a P7 point.
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