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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Chp 18 Leases IFRS 16 Example 4 – Doubt on Useful Life of Asset
In the video explanation, the machinery is depreciated over 5 years (lease term). But the question mentions the lease type as finance lease, and the useful life is 6 years.
Shouldn’t the asset then be depreciated over 6 years instead of 5 years as the ownership passes at the end of the lease term?
No reference in the scenario to ownership passing at the end of the lease.
So, shorter of life and lease term