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lease -Rent free period

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › lease -Rent free period

  • This topic has 1 reply, 2 voices, and was last updated 4 months ago by P2-D2.
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  • March 1, 2025 at 6:32 am #715660
    mansha
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    what is the impact of rent free period on lease liability and ROU ASSET?will interest be accured during RFP ,though payment will start after rent free period ?

    March 1, 2025 at 2:26 pm #715677
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    If there is a rent free period then we normally see this where we have made the exemption for a short lease asset. We would just total all the payments and divide by the number of years on the lease.

    If we do not take an exemption then there would not be anything to add to the ROU asset and there would be nothing to deduct in the lease liability table.

    Thanks

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