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IAS 17 Leases

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › IAS 17 Leases

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
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  • Author
    Posts
  • August 24, 2015 at 10:26 am #268330
    daina5
    Member
    • Topics: 12
    • Replies: 9
    • ☆

    A hired a machine under a finance lease . the cash price of machine was $3.5m and the present value of minimum lease payments was $3.3m. now, out of these two which amount will be used while calculating movement on liabilities and why ?

    August 24, 2015 at 1:52 pm #268350
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    $3.3m – because the amount to be capitalised is the LOWER of the present value of the minimum lease payments and the arms length cash price of the asset

    August 24, 2015 at 5:54 pm #268377
    daina5
    Member
    • Topics: 12
    • Replies: 9
    • ☆

    and what if he have fair value of $3.4m ..then ?

    August 24, 2015 at 11:26 pm #268407
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    I’ve just explained that in my previous post!

    $3.3m

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