Curitiba plc., a services provider, leased a computer from CZ Finance plc. on 1 January 20X1. The terms of the lease are that Curitiba plc. will pay four annual instalments of £12,000, with the payments being made on 1 January of each year. The interest rate implicit in the lease is 5% per year. The cost of the computer at the date of commencement of the lease would be £44,679. Discount factors are given in the Appendix. Discount Rate (5%): 1 0.9520 2 0.9070 3 0.8640 4 0.8230 5 0.7840. Required: 1.Compute the amount of the lease obligation to be shown at the end of each year in the statement of financial position of Curitiba plc. Show amounts to the nearest pound. 2. Applying IASB’s accounting standard IFRS 16 Leases, show how the lease would be accounted for in Curitiba plc’s financial statements for the year ended 31 December 20X4.
Curitiba plc., a services provider, leased a computer from CZ Finance plc. on 1 January 20X1. The terms of the lease are that Curitiba plc. will pay four annual instalments of £12,000, with the payments being made on 1 January of each year. The interest rate implicit in the lease is 5% per year. The cost of the computer at the date of commencement of the lease would be £44,679. Discount factors are given in the Appendix.
Discount Rate (5%):
1 0.9520
2 0.9070
3 0.8640
4 0.8230
5 0.7840.
Required:
1.Compute the amount of the lease obligation to be shown at the end of each year in the statement of financial position of Curitiba plc. Show amounts to the nearest pound.
2. Applying IASB’s accounting standard IFRS 16 Leases, show how the lease would be accounted for in Curitiba plc’s financial statements for the year ended 31 December 20X4.
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