Leases Flashcards
1
Q
Stages of accounting for leases
A
Initial measurement of the right-to-use asset
Depreciating the asset - shorter of lease term or the asset’s useful life
Making the payment
Finance charge
2
Q
Initial measurement journal entry
A
Dr right to use asset
Cr lease liability
Cr cash (deposit / first instalment + fees)
Cr provisions (any dismantling costs)
3
Q
Depreciating the asset journal entry
A
Dr depreciation expense
Cr accumulated depreciation
4
Q
Making the payment journal entry
A
Dr lease liability
Cr cash (TP if payment missed)
5
Q
Finance charge journal entry
A
