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How is the non current liability calculated for 2nd year of lease, with 5 years agreement, 2m deposit, pv 25m, 10% finance cost and annual rental 6m paid in arrears? I cant figure out the answer on Bpp practice kit which says its 3 850 000.
Hi,
To calculate the NCL you need to draw up the lease payable table, and continue it for one year after the reporting date. You then look at the final payment of the following year and the number immediately to the right is the NCL figure. It is explained in the videos if memory serves me correctly.
Thanks
How to solve, workings ?:
JC entered into a lease for a machine on 1 Apr 20X0 with $15,000 payments made annually in arrears & lease payments present value was $100,650 with 8% implicit interest rate. Lease term and machine useful life are 10 years. For year end 31 Dec 20X0:
Answer: Total amount charged to profit or loss for the right-of-use asset is $13,588
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