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Dear Sir / Madam,
This may sound childish but kindly throw light on it .
1) MR Co has leased Asset – What does it mean whether MR CO is Lessee or Lessor !
2) My 2nd query is , in Finance Lease – Lessee shows Asset and Liability both for Obligation . And It should be
Lowest of PV of Future Payments or Fair Value of Asset . Is it correct ! If Yes, in one of the Problems in BPP P7 , it is not followed so . That has created confusion in my mind that I may be wrong !Deep
1) I can’t answer! Normally you would assume that MR Co was a lessee but at P7 level ….. Is it not obvious from the context? What words come after your quoted introduction?
2) You’re correct – it is the lower of the present value of the minimum lease payments and the fair (or cash) value of the asset
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