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Leasing IFRS16

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Leasing IFRS16

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • May 1, 2021 at 2:25 pm #619373
    suleymanabuzerli
    Member
    • Topics: 84
    • Replies: 32
    • ☆☆

    Which of the following would not be included within the initial cost of a right?of?use asset?
    A Installation cost of the asset
    B Estimated cost of dismantling the asset at the end of the lease period
    C Payments made to the lessor before commencement of the lease
    D Total lease rentals payable under the lease agreement

    This question belongs to Kaplan

    I chose C but answer were given D

    but Total lease rental payable is capitalised

    pls clarify my this question?

    thanks!

    May 6, 2021 at 9:48 am #619832
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    It is a a bit of a trick but it is the present value of lease payments that is part of the ROU asset and not the total payments, hence the correct answer is D.

    C is part of the ROU asset as this would include any deposits made at the start of the lease period.

    Thanks

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