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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 16 Leases (Specimen 2)
Given that there is a lease, when year-end cash payment occur.
“The year-end cash payment should be removed from profit or loss and deducted from the carrying amount of the liability.”
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Why year-end cash payment should be removed from SoPL? What do that means?
When there is a payment, shouldn’t the double entry be like
Dr Lease Liability
Cr Bank
Thank you.
It is likely that the client has charged the cash payment as an expense in the P&L. So the expense needs to be reversed.