Keeping in view the IAS-17, classify the following transactions with reasons into operating lease or finance lease: LB Limited has obtained a generator for official lease for 2 year period whose useful life is 5 years. The C Ltd. has acquired an asset on lease the ownership of which will be transferred to the company at the end of lease term. iii.The D Itd. has acquired an asset on lease with an option to buy it at the end of lease term at scrap value. iv The Z Ltd. has acquired an asset on lease for 9 years. The economic life of the asset is 10 years. The company has no intention to purchase it at the end of lease term. vX Ltd. has acquired an asset with annual lease payment of Rs. 50,000 for ten years whereas the fair value of the asset is Rs. 210,000
Keeping in view the IAS-17, classify the following transactions with reasons into operating lease or finance lease: LB Limited has obtained a generator for official lease for 2 year period whose useful life is 5 years. The C Ltd. has acquired an asset on lease the ownership of which will be transferred to the company at the end of lease term. iii.The D Itd. has acquired an asset on lease with an option to buy it at the end of lease term at scrap value. iv The Z Ltd. has acquired an asset on lease for 9 years. The economic life of the asset is 10 years. The company has no intention to purchase it at the end of lease term. vX Ltd. has acquired an asset with annual lease payment of Rs. 50,000 for ten years whereas the fair value of the asset is Rs. 210,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Keeping in view the IAS-17, classify the following transactions with reasons into
operating lease or finance lease:
LB Limited has obtained a generator for official lease for 2 year period whose useful life
is 5 years.
The C Ltd. has acquired an asset on lease the ownership of which will be transferred
to the company at the end of lease term.
iii.The D Itd. has acquired an asset on lease with an option to buy it at the end of lease
term at scrap value.
iv The Z Ltd. has acquired an asset on lease for 9 years. The economic life of the asset
is 10 years. The company has no intention to purchase it at the end of lease term.
vX Ltd. has acquired an asset with annual lease payment of Rs. 50,000 for ten years
whereas the fair value of the asset is Rs. 210,000
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