PFRS 16 (LEASES)

prescribes the accounting & disclosure requirements for leases.

a contract or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.

two (2) parties of lease contract

the entity that obtains the right to use an underlying asset for a period of time in exchange for consideration.

the entity that provides the right to use an underlying asset for a period of time in exchange for consideration.

is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

An entity has the right to control the use of an identified asset if it has both (2).

The entity has the right to control the use of an identified asset if it has the right to obtain substantially all ___ from the use of identified asset.

three (3) essential elements of lease.

An asset can be an ___ by being __ identified in the contract or by being ___ specified at the time the asset is made available for use by the customet.

readily available at the inception of the contract.

not yet available at the inception of the contract but the lessor promise to have it ready for the lessee's use at the commencement of the lease.

A portion of an asset is an identified asset if its ___.

An asset is not an identified asset if the supplier has the ___ to substitute throughout the period of time.

the right to substitute an asset is ___ if the supplier can exercise it throughout the contract period & exercising the right benefits the supplier economically.

it is ___ if the supplier cannot exercise it throughout the contract period, such as when the substitution is made only on a partictular date or only during repairs and meintenance.

controls the use of identified if its has the right to obtain substantially all of the economic benefits from thr asset throughout the period.

include contractual restrictions designed to protect the supplier's interest in the asset or its personnel, or to ensure compliance with laws and regulations.

the non cancellable period of a lease plus (or minus) any lease extension if reasonably certain to be exercised.

the lease term begins at the ___ and includes any rent free periods provided by the lessor to the lessee.

A lessee recognizes ___ and ___ at the commencement date.

initial measurement of lease liability?

the discount rate used at the initial measurement of lease liability?

subsequent measurement of lease liability?

initial measurement of right of use asset?

subsequent measurement of right of use asset?

if ownership transfers to the lessee at the end of the lease term, the asset is depreciated over its?

if ownership is not transferred to the lessee at the end of the lease term, the asset is depreciated over its?

A lessee may elect not to apply general recognition for ___ and leases for which the underlying asset is of ___.

one with a lease term of 12 months or less.

one which if new would be considered to have a relatively low value.

lease that transfers substantially all the risk and rewards incidental to ownership of an underlying asset.

other term for financial lease

lease that does not transfers substantially all the risk and rewards incidental to ownership of an underlying asset.

it is a finance lease if the lease transfers ___ of the asset to the lessee by the end of the lease term.

lessee has the option to purchase the asset at a price lower than the asset's fv at the date option becomes exerciseable.

it is a finance lease if the lease term is for the major part (atleast __%) of the __ life of the asset.

it is a finance lease if the amount of the pv of lease payments amounts to atleast substantially all (atleast __%) of the fv of the leased asset at the inception date.

it is a finance lease if the lease asset is of ___ that only the lessee can use without major modifications.

earliest of the date of the lease agreement.

earliest of the date of commitment by the parties to the principal provisions of the lease.

it is on this date that a lease is classified as either operating or finance lease.

in case of finance lease, the amounts to be recognized on the commencement date are determined.

the date on which the lessor makes an underlying asset available for use by lessee.

date the lease is initially recognized.