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Are a lease liability and a right-of-use asset required to be recognised by a lessee at lease inception for all leases? LO 11.2 There are limited exemptions. Paragraph 5 of AASB 16 states that a

Are a lease liability and a right-of-use asset required to be recognised by a lessee at lease inception for all leases? LO 11.2 There are limited exemptions. Paragraph 5 of AASB 16 states that a

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Are a lease liability and a right-of-use asset required to be recognised by a lessee at lease inception for all leases? LO 11.2 There are limited exemptions. Paragraph 5 of AASB 16 states that a lease liability, and a right-of-use asset, do not need to be recognised where the lease: Is a 'short-term lease', and Is for an underlying asset of 'low value'. A short-term lease is defined in AASB 16 as a lease that, at the commencement date, has a lease term of 12 months or less. However, a lease that contains a purchase option is not a short-term lease. In terms of the value that items would have for them to be deemed to be of 'low value', the IASB suggests they would be in the order of magnitude of US$5000 or less.
Transcribed Image Text:Are a lease liability and a right-of-use asset required to be recognised by a lessee at lease inception for all leases? LO 11.2 There are limited exemptions. Paragraph 5 of AASB 16 states that a lease liability, and a right-of-use asset, do not need to be recognised where the lease: Is a 'short-term lease', and Is for an underlying asset of 'low value'. A short-term lease is defined in AASB 16 as a lease that, at the commencement date, has a lease term of 12 months or less. However, a lease that contains a purchase option is not a short-term lease. In terms of the value that items would have for them to be deemed to be of 'low value', the IASB suggests they would be in the order of magnitude of US$5000 or less.
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