Leases

Question 1

What should the initial liability of a lease be made up of?

Answer 1

The present value of the lease payments that have not yet been paid
Fixed payments
Option to purchase see
Termination penalties

Question 2

What should the initial liability of a right-of-use asset be made up of?

Answer 2

Amount of the initial measurement of the lease liability
Any lease payments made at or before the commencement date
Initial direct costs
Estimated costs of removing or dismantling the asset