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IFRS 16 Leases (Specimen 2)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 16 Leases (Specimen 2)

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.
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  • Author
    Posts
  • December 25, 2020 at 1:40 pm #600852
    23.56
    Participant
    • Topics: 8
    • Replies: 5
    • ☆

    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.”

    —

    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.

    December 26, 2020 at 3:03 pm #600912
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3402
    • ☆☆☆☆☆

    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.

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