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I have a question on a lease liability / present value and a initial deposit.
Just to confirm when there is a lease question, the initial deposit is added to the ROU asset, but it has nothing to do with the lease liability amortised cost calc???
for eg if it gave you PV of future lease paymnts for example of say 200,000, you wouldnt deduct the initial deposit of say 20k from this figure for amort cost calc, the b/f would still be 200k?(not 180k?) even if initial deposit was on exact same date as pv figure?
Thank you in advance
Martin
Hi Martin,
This causes a lot of confusion for many students and the reason is because the 200,000 is the present value of future lease payments. The deposit is not a future lease payment and has already been paid ad therefore will not need deducting from the 200,000 figure. It will be added to the ROU asset as it is one of the payments made.
Thanks
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