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Leasing IFRS16

This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.

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May 1, 2021 at 2:25 pm #619373
suleymanabuzerli
- 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: 6119
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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