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Last Updated on 24/02/2020 by 75385885 4 proper uses of Residual value Topics hide 4 proper uses of Residual value Residual value IAS 16 Definition: The residual-value of an asset is the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset … Read more
Topics hide IFRS 2022 update – IFRS 16 Lease Liability in a Sale and Leaseback Key requirements Background Amendment to IFRS 16 Effective date and transition Illustrative examples to IFRS 16 IFRS 2022 update – IFRS 16 Lease Liability in a Sale and Leaseback Effective for annual periods beginning on or after 1 January 2024. … Read more
Topics hide IRR How to calculate Interest rate implicit in the lease What is readily determinable? The impact of variable lease payments on the interest rate implicit in the lease Lessee’s incremental borrowing rate Case – Blended rates A three-step approach to the composition of discount rates Step 1 – Determining the reference rate Step … Read more
Topics hide Landlord Lease payments 1. Overview 2 Fixed and in-substance fixed payments 3 Variable lease payments 3.1 Payments that depend on an index or rate 3.2 Variable payments other than those that depend on an index or rate 4 Lease incentives Landlord Lease payments Distinguishing between fixed and variable lease payments will impact the … Read more
Topics hide Landlord Lease modifications / Rental modifications 1 Modifications to operating leases – General considerations 2. Modifications to operating leases related to COVID-19 3 Changes to operating leases that are not lease modifications 4 Changes to operating leases that are not lease modifications 5 Modifications to finance leases 5.1 Separate lease 5.2 Not a … Read more
Sub-leases of real estate New classification guidance means that more sub-leases are finance leases under IFRS 16 than previously, impacting the financial position and financial performance of intermediate landlords. A sub-lease is a transaction in which a lessee (or ‘intermediate lessor’) grants a right to use the underlying asset to a third party, and the … Read more
Topics hide Lease calculation The 5-step lease calculations model Step 1. Identification of a lease contract Step 2 Lease term Lease Options to Extend or Terminate Reassessment of Lease Term Step 3 Initial measurement of the lease liabilty Right-of-Use Asset Subsequent Measurement of Lease Liability Step 4 Historical reporting Step 5 Historical changes to the … Read more
Topics hide Landlord lease definition 1 Overview 3 Typical real estate arrangements Landlord lease definition Identifying a lease of real estate is usually straightforward – but some scenarios will require judgement. 1 Overview A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for … Read more
Topics hide Sale-and-leaseback of real estate Sale-and-leaseback Buyer-landlord Seller-tenant Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is a sale Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is not a sale Food for thought – How does a buyer-landlord assess whether a transaction qualifies for sale-and-leaseback accounting? Food for thought … Read more
Topics hide Leased investment property Food for thought – How does the accounting for leased investment properties differ under IFRS 16? Food for thought – Are there special rules for accounting for right-of-use investment property? Food for thought – How does a landlord apply the fair value model to a right-of-use asset? Leased investment property … Read more