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Hello, I am confused with what to do with an onerous contract when there is an operating lease.
Understand how to calculate the provision and this is recorded to P/L but what happen with the ROU asset and the lease liability that are already recognized in the SOFP? Are they derecognized? or continue the lease calculation until the end of the lease term?
Thank you.ROU asset – derecognise – expense in P&L
Lease liability – difference between existing liability and new liability (which you are describing as a provision) expensed or credited in the P&L. (If there is some uncertainty in timing or amount – it will be a provision – if not – it will be a liability)
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