Week 8 Flashcards
Investment Property
IFRS term meaning held for appreciation or as a rental
A lease is ______ (regarding taxes)
Tax deductable
What section is a write off for equipment?
Section 179
ATF
Accounting, tax, and finance
Need to use all of these to make good investment decisions
4 criteria of USG leases. If these are met (and not met), what type of lease is it?
- Transfer of title at the end of the lease
- Bargain purchase option
- Lease term >= 75% of the economic life of an asset
- Future minimum lease payments >= 90% of the fair value of the lease
If any of these criteria are met, it’s a capital lease. If none of these are met, its an operating lease
Operating lease goes on the _____
Income statement
Ex. Office rental
Capital lease goes on the ____ (USG old standard)
Balance sheet
Donor-advised fund
Give stock to this entity to give away more money in donations. Also, you get a tax deduction
What do they call a capital lease in IFRS?
Financing lease
In IFRS leasing, there are _____ (how it differs from USG)
No bright lines, meaning they take out the numbers in the USG four criteria of a lease
New Leasing model (definition)
IFRS and USG
New leasing definition: Right to use and control an asset or a specified asset for significant economic benefit
For a period of time for consideration
Two types of leases in the new standard
Right to use and liability
Liability lease is a ____
Liability - to make lease payment
All leases in the new leasing model go on the _____
Balance sheet
Journal entry for new lease standard
When you get the lease
Dr. Right to use
Cr. Lease payments
When paid
Dr. Lease payment
Cr. Cash
“Right to use” is an ___ that is ____
An intangible asset that is amortized over the life of the lease
Intangibles with indefinite useful life in the new lease model ____
Need to be tested for impairment annually
Only assets you need to for impairment annually:
- Intangibles with an indefinite useful life
- goodwill
Intangible asset journal entry
Dr. Amortized
Cr. Accumulated amortized asset
Do not qualify for new leases
- Biological
- Exploration
- Intangibles
