Documente Academic
Documente Profesional
Documente Cultură
LECTURE AID
2018
Learning Objectives
• Identify a lease.
• Account for leases by a lessee using the general
recognition.
• Account for leases by a lessee using the recognition
exemption.
An entity has the right to control the use of an identified asset if it has
both of the following throughout the period of use:
1. the right to obtain substantially all of the economic
benefits from use of the identified asset; and
2. the right to direct the use of the identified asset.
• A customer does not have the right to use an identified asset if the
supplier has the substantive right to substitute the asset throughout
the period of use.
• A supplier’s right to substitute an asset is substantive if both of the
following conditions exist:
1. the supplier has the practical ability to substitute alternative assets
throughout the period of use; and
2. the supplier would benefit economically from the exercise of its
right to substitute the asset.
GENERAL RECOGNITION
• Lessee recognizes both:
1. Lease liability; and
2. Right-of-use asset
RECOGNITION EXEMPTION
(for ‘short-term” and ‘low value’ leases)
• Lessee recognizes lease payments as expense over the lease term
using straight line basis, or another more appropriate basis.