Leases

Question 1

Lease

Answer 1

A contract, or part of a contract, that conveys the right to control the use of an asset for a period of time in exchange for consideration

Question 2

Inception of contract

Answer 2

The earlier of the date of the lease agreement and the date of commitment by parties to the principle provisions of the lease

Question 3

Underlying asset

Answer 3

An asset that is the subject of a lease, for which the right of use has been provided by a lessor to a lessee

An asset is identified what it has been explicitly specified in the contract

Question 4

Lessee (1) vs Lessor (2)

Answer 4

1. an entity that OBTAINS the right to use an underlying asset for a period of time in exchange for consideration
2. an entity that PROVIDES the right to use an underlying asset for a period of time in exchange for consideration

Question 5

Right to control

Answer 5

1. The right to obtain substantially all of the economic benefits from the use of the identified asset
2. The right to direct the use of the identified asset

Question 6

Practical expedient

Answer 6

covers leases of a LOW VALUE or a lease term that is LESS than 12 months

Question 7

Lease term

Answer 7

The non-cancellable period of the lease for which the lessee has the right to use the underlying asset

Begins at commencement date