7. According are expensed outright at the lease commencement date. 8. The lease liability is subsequently remeasured to reflect changes in the amount expected to be payable under the residual value guarantee. Fact pattern On January 1, 20x1, Lessee enters into a 4-year lease of an asset for an annual rent of P10,000 payable at the beginning of each year. The interest rate implicit in the lease is 10%, while the lessee's incremental borrowing rate is 12%.
7. According are expensed outright at the lease commencement date. 8. The lease liability is subsequently remeasured to reflect changes in the amount expected to be payable under the residual value guarantee. Fact pattern On January 1, 20x1, Lessee enters into a 4-year lease of an asset for an annual rent of P10,000 payable at the beginning of each year. The interest rate implicit in the lease is 10%, while the lessee's incremental borrowing rate is 12%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer 7-10. True or False.
Transcribed Image Text:7. According to PFRS 16, initial direct costs incurred by a lessee
are expensed outright at the lease commencement date.
8. The lease liability is subsequently remeasured to reflect
changes in the amount expected to be payable under the
residual value guarantee.
Fact pattern
On January 1, 20x1, Lessee enters into a 4-year lease of an asset for
an annual rent of P10,000 payable at the beginning of each year.
The interest rate implicit in the lease is 10%, while the lessee's
incremental borrowing rate is 12%.
3. The initial measurement of the right-of-use asset is determined
as follows: P10,000 x PV of an ordinary annuity of P1 @10%,
n=4.
10. The initial measurement of the lease liability is determined as
follows: P10,000 x PV of an annuity due of P1 @10%, n=4.
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