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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Onerous Lease
for example if a company is looking too get out of a lease agreement and lease term has 3 years left and books a provision for it based on 3 years payment,
now can we call it a provision for onerous contract? and is the provision correct accounting treatment
Hi,
Yes, if we cannot get out of the contract and if there is no option to sub-let the property then we provide for the remaining years on the lease.
Thanks
