Dear Mr Mike,
The June 2015 exam tested lease premium on operating leases.
The question goes thus “The operating lease payments represent an
annual payment (in advance) of $1 million and a lease premium of $1 million. The lease is for 4 years”
How do we treat this? Do we take the whole $2M to Profit or loss?
Or do we time-apportion the lease premium and take $250,000 to profit or loss and then treat $750,000 as prepayments in the SOFP?
A quick response will be appreciated. Thanks
Ask the Tutor ACCA FR
Treatment of lease premium in operating leases
The second option
Is that prompt enough?
Thank you.
It was way quicker than I expected
Its just surprising how BPP completely left the concept out of their books
Well, ok, but in fairness to them, it IS difficult to remember to put everything in
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