If a ROU asset is impaired under a lease agreement, how does this affect the corresponding lease liability?
I have read the below technical article but struggling to get my head around when apply IAS 36 or IAS37.
https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/lease-contracts.html
Ask the Tutor ACCA SBR
Impairment of a ROU Asset
4y ago#1Assume I am lessor.
At inception, ROU asset and lease liability is 400.
The next day I break the asset and it is not insured.
Dr P&L Cr ROU
But I still have to pay for it, so no adjustment to liability unless I can negotiate a settlement with lessor.
Here's a quote from the article you highlighted:
"However, candidates should also appreciate that marks will be awarded for any discussion that is rational and logical, even though it doesn’t appear in the suggested solution."
:)
Sign into reply to this topic.