Corporate Accounting

Running head: CORPORATE ACCOUNTING
Corporate Accounting
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1CORPORATE ACCOUNTING
Table of Contents
Part A.........................................................................................................................................2
Part B.........................................................................................................................................5
Reference:................................................................................................................................7

2CORPORATE ACCOUNTING
Part A
Under finance lease risk as well as reward of ownership in a considerable way
is being transferred. The lease those are not classified under financial lease are
termed as operating lease. The tenure of a lease is the least phase of time for that
the lessee has entered into an agreement for leasing the asset in addition to that the
agreement the extension of period for lease accordingly by inspecting the lease. The
lease payment is done on the contractual basis. It does not include facilities cost,
rents that contingent in nature and taxes. In case of lessee the sum that is finalised
by the lessee or the party those are related with lease along with the price for
exercising any option in place where exercising is rationally convinced at inception.
The lessor would pay on the guaranteed salvage cost. The gross investment in lease
is about the least payment of lease inclusive of any outstanding value that does not
have guarantee. The net investment in case of lease is the current price of the
speculation in the lease at what time reduced at the interest rate implied in the lease
(Hossain 2013).
As per AASB 16 states the disclosure of the lease for lessees.it states that
the lessee shall disclose all the information in the notes to account that is presented
in the financial statement. The user can get the idea of the effects of lease that it has
on the financial from the components of financial statement such as cash flow
statement, or profit or loss that is being used by the lessee. In the para of 52 to 60 of
AASB 16 specifically discuss the needs of meeting the objective of lessee regarding
disclosure of a lease. The para states that the information about the lease shall be
given as a separate note in the notes to account section of the statement. The
information should not be duplicate and shall be recorded in cross reference note
(Hossain 2013).