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Leases IAS 17.

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Presentation on theme: "Leases IAS 17."— Presentation transcript:

1 Leases IAS 17

2 Quick Quiz Quiz

3 Basically Finance Lease is
Transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.

4 Basically Operating lease is
A lease other than a finance lease

5 Question Elliott and Elliot pg 483 q 1 Parts A and C only

6 Solution Statement of Financial Position Layout
Assets Cost of leased asset Depreciation for year Liabilities Present value of future payments

7 Solution Statement Income Layout
Interest on leasing obligation Depreciation on leased asset Liability at year end

8 Solution Answer Assets Liabilities Cost of leased asset
Depreciation for year (350,000/6) Liabilities Present value of future payments Either (80, , , , ,989) or (350,000+52,500-92,500) 350,000 58,333 291,667 310,000

9 Solution Statement Income Layout
Interest on leasing obligation  (£350,000 x 15%) Depreciation on leased asset Liability at year end 52,500 58,333 110,833

10 Question Question 4 Elliott & Elliott Page 485 No 4

11 Headings for workings Period Liability Rental Liability Finance Liability at start payment during charge at end of period period (4.3535%) of period

12 Headings 2 Statement of comprehensive income
Finance Depreciation Total charge

13 Headings 3 statement of financial position Assets Liabilities
Equipment Depreciation  Liabilities Within 2–5 years Within 1 year

14 For next week Questions


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