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Lease

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Lease

Viewing 2 posts - 1 through 2 (of 2 total)
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  • March 21, 2018 at 7:32 pm #443310
    crisdinayanyan
    Member
    • Topics: 17
    • Replies: 17
    • ☆

    Hi Sir, may I ask a question about the lease term. If the lease term is 5 years for an asset and the useful use is 6 years. Shall we use 6 years for calculating the PV of lease liability because it forms a major part of the economic life of the asset? How to define the ‘ major”?

    March 23, 2018 at 9:10 pm #443639
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7079
    • ☆☆☆☆☆

    Hi,

    We are only using the asset for the lease term of 5 years and so will only be paying lease payments for 5 years. We will therefore only have 5 years worth of payments to discount to present value.

    Thanks

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