AC2101 S1 2014 Seminar 5 Leases (Anil).pptx

AC2101 S1 2014 Seminar 5 Leases(Anilx

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Unformatted text preview: Investment Property -   Sales Type Lease -   Sale and Leaseback Arrangements 6 3 Residual Value: Guaranteed RV GRV - Lessor * GRV taken into account in determining (i) ALP, (ii) MLP, and (iii) depreciation * Higher of estimated RV and GRV to be used by lessor * If FV of machine at end of lease < GRV, Dr Machine (FV at end of lease) Dr Cash (Lessee pays to make up the difference) Cr Lease Receivable (at GRV) 7 Residual Value: Guaranteed RV GRV - Lessee * GRV taken into account in determining (i) MLP and (ii) depreciation * Closing a/cs: Dr Lease Payable Dr Accumulated Dep. Cr Leased Asset GRV x y (y – x = GRV) * If FV of asset at end of lease < GRV, Dr Loss on finance lease Cr Cash 8 4 Residual Value: Un...
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This document was uploaded on 02/10/2014.

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