a obligations either to perform or to refrain from certain significant

A obligations either to perform or to refrain from

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(a)     obligations either to perform or to refrain from certain significant activities are conditions of  earning the fee received, and therefore execution of a legally binding arrangement is not  the most significant act required by the arrangement; (b)     limitations are put on the use of the underlying asset that have the practical effect of  restricting and significantly changing the Entity's ability to use (eg deplete, sell or pledge  as collateral) the asset; (c)     the possibility of reimbursing any amount of the fee and possibly paying some additional  amount is not remote. This occurs when, for example,
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(i)     the underlying asset is not a specialised asset that is required by the Entity to  conduct its business, and therefore there is a possibility that the Entity may pay an  amount to terminate the arrangement early; or (ii)     the Entity is required by the terms of the arrangement, or has some or total  discretion, to invest a prepaid amount in assets carrying more than an insignificant  amount of risk (eg currency, interest rate or credit risk). In this circumstance, the  risk of the investment's value being insufficient to satisfy the lease payment  obligations is not remote, and therefore there is a possibility that the Entity may be  required to pay some amount. 9     The fee shall be presented in the statement of comprehensive income based on its economic  substance and nature. Disclosure 10     All aspects of an arrangement that does not, in substance, involve a lease under  IAS 17  shall be  considered in determining the appropriate disclosures that are necessary to understand the  arrangement and the accounting treatment adopted. An Entity shall disclose the following in each  period that an arrangement exists: (a)     a description of the arrangement including: (i)     the underlying asset and any restrictions on its use; (ii)     the life and other significant terms of the arrangement; (iii)     the transactions that are linked together, including any options; and (b)     the accounting treatment applied to any fee received, the amount recognised as income in  the period, and the line item of the statement of comprehensive income in which it is  included. 11     The disclosures required in accordance with  paragraph 10  of this Interpretation shall be provided  individually for each arrangement or in aggregate for each class of arrangement. A class is a  grouping of arrangements with underlying assets of a similar nature (eg power plants).
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  • Spring '13
  • ArmeeJayCresmundo
  • entity, separate Investment Account, lease payment obligations

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