• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

leases

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › leases

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 22, 2015 at 3:39 pm #278422
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    the text says that the initial setup of the asset/liability in a finance lease is done at the lower of pv or the fair value.

    question:

    a company can buy an asset for 5710 or lease at 2000/year for 4 years, paid in arrears. implicit interest rate is 15%.

    the pv = 8000 x (1/(1.15)^4) = 4574.

    so this is lower than the FV of 5710

    but the workings of the lease payments uses 5710 as the starting balance.

    why?

    October 23, 2015 at 8:16 am #278511
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    If you were to calculate

    the present value of $2,000 in one year’s time ($1,739.1) and

    the present value of $2,000 in two years’ time ($1,512.3) and

    the present value of $2,000 in three years’ time ($1,315.0) and

    the present value of $2,000 in four years’ time ($1,143.5) and

    then add them up, it comes to $5,710

    “8000 x (1/(1.15)^4) = 4574.” is not the same as $2,000 for 4 years at 15%

    Maybe time to go back to F2?

    October 25, 2015 at 5:50 am #278792
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    i did that exact same thing ..!!! thanks

    October 25, 2015 at 7:41 am #278805
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    You’re welcome

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Salexy on Linear Programming – Spare capacity and Shadow prices – ACCA Performance Management (PM)
  • omerbasheer on The Statement of Financial Position and Income Statement (part d)
  • Kim Smith on AA Chapter 9 Questions
  • Walkera on Basic Variance Analysis part 1 – ACCA Performance Management (PM)
  • kartierclass on AA Chapter 9 Questions

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in