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Deposit in lease

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Deposit in lease

  • This topic has 0 replies, 1 voice, and was last updated 10 months ago by farnaz1986.
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  • August 12, 2021 at 12:28 pm #631336
    farnaz1986
    • Topics: 4
    • Replies: 6
    • ☆

    Hi
    regarding of couple of question in revision kit I am very confused
    would be happy if you can help me
    in Lease ( right of asset ) we include all the direct cost less incentive cost
    right ? the deposit in my view is incentive cost because is refundable after the term of lease.

    am i right ? therefore the PV of lease would be less deposit and then depreciate unless we will be told that it is non refundable which I think it would be therefore direct cost
    with this information let’s look at question number 317 at lease part
    the present value is 23m and the deposit is 2m why it did not deduct the deposit ?? a
    the answer is 23 + 2 = 25
    i think it should be 23 -2 then divided by lease term

    generally is the deposit direct cost or incentive cost ????
    thanks in advance

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