General description of the nature of the lease 2

Info icon This preview shows pages 53–59. Sign up to view the full content.

View Full Document Right Arrow Icon
General description of the nature of the lease.  2. Nature, timing and amount of cash inflows and outflows associated with  leases, including payments for each of the five succeeding years.  3. Amount of lease revenues and expenses reported in the income statement  each period.  4. Description and amounts of leased assets by major balance sheet  classification and related liabilities. 5. Amounts receivable and unearned revenues under lease. Disclosing Lease Data Special Accounting Problems Special Accounting Problems Special Accounting Problems Special Accounting Problems
Image of page 53

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 15-54 Leases IAS 17 Overall, similar to US GAAP Differences Terminology IFRS have more principle based classification requirements while US GAAP provides precise guidelines.
Image of page 54
Chapter 15-55 IAS 17- Leases A lease may be classified as either a capital or operating lease under US GAAP. Terminology difference Capital lease under US GAAP is referred to as a finance lease under IFRS
Image of page 55

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 15-56 Lease Criteria US GAAP and IFRS contain four lease criteria that are indicators of a capital (finance) lease. The lessee acquires ownership of the leased asset at the conclusion of the lease The lessee has a bargain purchase option The term of the lease covers the majority of the leased asset’s economic life The present value of minimum lease payments is equivalent to nearly all of the leased asset’s fair value.
Image of page 56
Chapter 15-57 Lease Criteria IFRS has a fifth indicator of a finance lease that is not specified by US GAAP. Leased assets are of a specialized nature and are only usable by the lessee unless substantial adjustments are made to the asset.
Image of page 57

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 15-58 Criteria Differences US GAAP specifies that the majority of the leased asset’s economic life is equal to or greater than 75% of the asset’s life. US GAAP defines substantially all of the leased asset’s fair value as 90% of the fair value of the property less any investment tax credit retained by the lessor. IFRS does not specifically define ‘majority of’ or ‘substantially all’.
Image of page 58
Chapter 15-59 1. Removes the distinction between operating and financing 2. On the balance sheet include a ‘right-to-use’ asset 3. Lease payments liability 4. Amortize and interest expense on P&L 5. Include additional notes 6. Exposure draft rereleased on October 23, 2012. 7. Implication, substantively only have financing leases.  Exposure Draft on Leases Exposure Draft on Leases Exposure Draft on Leases Exposure Draft on Leases
Image of page 59
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern