B operates and maintains the ship and is responsible for the safe passage of

B operates and maintains the ship and is responsible

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substantially all of the capacity of the ship. B operates and maintains the ship and is responsible for the safe passage of the cargo on board the ship. A is prohibited from hiring another operator for the ship during the term of the contract or operating the ship itself. b. Customer T enters into a 5 year contract with company U, a ship owner, for the use of an identified ship. T decides whether and what cargo will be transported; when and to which ports the ship will sail throughout the period of use, subject to restrictions specified in the contract. These restrictions prevent T from sailing the ship into waters at a high risk of piracy or carrying explosive materials as cargo. U operates and maintains the ship and is responsible for safe passage. Required : Determine whether the contracts above contain a lease. Example 4 Company M rents trucks for delivery and pays RM2,000,000 per year. This payment includes the cost for maintenance services. The rental for similar warehouse is RM1,800,000 per year without maintenance services. The annual maintenance services cost is RM500,000. Required : Determine the lease and non-lease components. Example 5 a. Measurement basis Lessee X has entered into a contract with Lessor L to lease a building for 7 years. The annual lease payments are RM4.5 m payable at the end of each year. X’s incremental borrowing cost is 5.04%.
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  • Fall '17
  • RONALDO

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