Notes

Replacing IAS 17 Leases
IFRS 15 w/15 (restatement just one)
Objective = Principles for recognition,measurement, presentation and disclosure of leases

IFRS doesn't apply to:
-Leases for use of minerals, oils, natural gas and similar
-Biological assets (IAS 41)
-intellectual-property licenses (IFRS (16)
- Service concession arrangements (
- Right under leasing (IAS 38)

Inception of each contract
- right to control the use of asset for a period of time in exchange for consideration.

Lesse (AT COMMENCEMENT)
1. right of use asset
- Amount for lease liability
-lease payment before/on commencement date - lease incentives
-initial direct cost
-estimate of dismantaling asset
2. Lease liabilities (Payments not paid at the commencment date)
-> discounted interest rate implicit in the lease
-Fixed Payments
-variable payments
-residual value
-Excercise price of purchase option
-penalties for terminating early

Lesse (AFTER COMMENCEMENT)
1. right of use asset
-Dr. P/L depric exp ; Cr. Accumlated dep.
2. Lease liabilities (Payments not paid at the commencment
- Interest on LL
Dr. P/L interest ; Cr. LL
- reduction of LL
Dr. LL ; Cr. Cash/Bank

Classification: ARE SUBSTANTIAL rewards AND risks TRANSFERRED TO LESSEE
- yES. (Finance lease
1. Ownership transferred
2.option to purchase asset at price < FV
3. Lease term =>major part of economic life of asset
4. PV of lease payment => close to FV
5. Leased asset are specialized nature
- No (Operating lease)

Lesse Finance lease (AFTER COMMENCEMENT)
1. Dr. Lease rcv. (payments not paid at commencement date)+ initial direct cost
-Fixed Payments
-variable payments
-residual value
-Excercise price of purchase option
-penalties for terminating early
2. Cr. PPE

Lesse Finance lease (Subsequent payments)