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Please show how to calculate the NET payables amount when reconciliating the Obligation under Finance lease with the PV of MLP?
Thanks,
How much is to be paid within 12 months? Discount that amount for 1 year and that gives you the NET amount payable within 1 year.
Do the same for the payment more than 5 years hence but discount that for 6 years and that’s the NET amount payable more than 5 years hence.
Add those two together and deduct from the balance shown on the Obligations under Finance Lease Account. The remainder is the NET amount payable more than one and less than six years hence
Is that ok?
There may be slight inaccuracies in the printed figures but the principle should be clear
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Seem I do sth wrong here, Mr Mike?
Net payables:
Within 1 year: 3000/(1+10%) = 2727 (#2790)
2< < 5years: (balancing) 13295 – (2727+1693) = 8875 (#8793)
> 5 years: 3000/(1+10%)^6 = 1693 (#1712)Thanks.
No, that’s correct – I did say that my figures could be more accurate – I probably tried to do it in my head because I rarely use a calculator. But your principles are correct – I’ll try to remember to change the notes on the next update this Summer
Sorry for your confusion
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