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
