Leases

Question 1

IFRS states that a contract contains a lease if ?

Answer 1

A) there is an identified asset
B) the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration

Question 2

A contract conveys the right to control the use of an identified asset if the customer has both ?

Answer 2

A) the right to obtain substantially all of the economic benefits from the use of the asset

B) the right to direct the use of the identified asset throughout the period of use

Question 3

IFRS 16 requires recognition of assets and liabilities for all leases except ?

Answer 3

A) short term leases (12 months or less)

B)leases of low value assets ($5000 or less)

Question 4

How do we account for leases ?

Answer 4

The lease liability is recognised at the commencement day and measured at an amount equal to the present value

It is accounted on the income statement but recognise separately the depreciation of lease assets and the interest on lease payments