Notes For L2
Notes For L2
Notes For L2
Yes
lessee? No
Notes for L2 lessor? Yes
lease asset? Yes
IFRS 16 Leasing
Identifying a lease – Identified assets, period of time, rights to obtain
substantially all of the economic benefits, rights to direct the use of asset
(control)
recognition
Exemption – short term lease, lease for low value assets
lease term
-non-cancellable period of a lease
-renewal/purchase option period LL+ Deposit - incentive + PV dismantling cost +
-option to terminate dispect cost
Prepared by : cygan 1
IAS 20 Government Grant
Prepared by : cygan 2
record in book that u hv grant
A government grant should only be recognised when there is reasonable
grant flw exp
assurance that: Expense
– the entity will comply with the conditions of the grant; and 1-50%
2-30%
– the entity will receive the grant. 3-20%
flw the percentage
Grants related to income should be recognised over the period in which the
associated costs are incurred.
Dr Bank
Grants related to assets may be presented by either: Cr Expenses/ income
– setting up the grant as deferred income; or
– offsetting the grant against the carrying amount of the relevant asset
see how many years
> 1yrs, hv to open DI acc
DI method, every yr take out from pnl
charge depreciation
income
Dr Exp
Cr Bank
a must!!!
Dr. Unamortised
Dr. Asset deferred
Dr. Unamortised Dr. Loss-P&L income
deferred Cr. Accum. depre
income Dr./Cr. G/L - P&L
Cr. Liability
Dr./Cr. G/L – P&L Cr. Liability
Cr. Liability
offset against asset
pay back the grant
Prepared by : cygan 4
IAS 16 Property Plant Equipment
Definition:
Prepared by : cygan 5
Being used in operations,
Has a long useful life
Possesses physical substance Dr PPE
Cr Bank/AP
Recognition: >50%
It is probable that future economic benefits associated with the asset will
flow to the entity; and
the cost of the asset to the entity can be measured reliably.
Subsequent expenditure:
capitalise if improve capacity Dr PPE
expense if maintain capacity Dr Expenses
Initial measurement:
(i) Purchased price
(ii) Direct attributable costs
(iii) Initial estimate of cost of dismantling and removing and restoring
(iv) Borrowing costs (if any)
FV
Cost excluded → cost of opening new facility, introducing new products, training
cost, conducting business in new location, admin and general overhead, internal
profit, abnormal cost, wasted resources, industrial disputes
Subsequent measurement: if u buy a machine from thailand
Cost model ship out
cost- Acc Dep--> impairment dismantling cost
testing product can be capitalised
Depreciation methods:
Prepared by : cygan 7
straight line = (cost – residual value)/useful life
reducing balance = O/CA x depreciation rate
unit output = [(cost – residual value) / estimated lifetime output] x
units of output
Cost
Prepared by : cygan 8
Prepared by : cygan 9