Corporate Accounting and Reporting: Finance Lease Disclosures Analysis
VerifiedAdded on 2021/06/17
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Report
AI Summary
This report provides a comprehensive analysis of finance lease disclosures in corporate accounting, adhering to the guidelines of AASB 117 (IAS 17). The report begins by defining finance leases and differentiates them from operating leases, emphasizing that the focus is on finance leases. It outlines the disclosure requirements for both lessees and lessors, including the net carrying amount of assets, reconciliation of lease payments, and disclosures across different timeframes. The report highlights the need for lessees to recognize contingent rents as expenses and the disclosure of sublease payments. It also describes the general disclosure requirements for material lease agreements, such as the basis for contingent rent, renewal clauses, and lease agreement restrictions. For lessors, the report details the reconciliation of gross investment, the presentation of minimum lease payments, and disclosures related to unearned finance income and unguaranteed residual values. Furthermore, it explains the accounting treatment for lease obligations, including current and non-current liabilities, and the recording of assets and receivables. The report illustrates the accounting entries for lease payments, the treatment of interest income, and the handling of asset returns or purchases at the end of the lease term.
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