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Dear Mike,
Is the calculation for operating lease – payments required per annum?
I can calculate finance lease, but came across a question where lease treated incorrectly as operating lease.
I had to idenify the effect of incorrect treatment and was unsure how to achieve this?
Thanks
“operating lease – payments required per annum?”
Operating lease annual payments tend always to be a fixed figure
The question where you are required to rectify the incorrect accounting treatment will simply involve the reversal of the expensed operating lease payment (most likely for just the one year) and then recording the transaction correctly as an instalment payment on a finance lease
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