underreasonablyPROBLEM 1: TRUE OR FALSEinoptionalthe lease.exchange for consideration.L A lease that covers only the 1“ floor of a 10-storey buildingcannot qualify for accounting under PFRS 16 because thelessee does not have the right to obtain substantially all of theeconomic benefits of the entire building.4. Lessees apply a single recognition and measurement approachfor all leases, with optional exemptions for short-term leasesand leases of low-value assets.borrowingt cost zndet (ie, coopropriate)easuremerieceived les5. According to PFRS 16, the lessee includes in the leasepayments the price of a purchase option that the lessee isreasonably certain to exercise only if that price is bargain.6. According to PFRS 16, the lessee includes in the leasepayments only the amount that the lessee expects to pay on aresidual value guarantee.7. According to PFRS 16, initial direct costs incurred by a lesseeare expensed outright at the lease commencement date.8. The lease liability is subsequently remeasured to reflectchanges in the amount expected to be payable under theresidual value guarantee.costs; (d)"low valupayments asS, or anotherOn January 1, 20x1, Lessee enters into a 4-year lease of an asset foran annual rent of P10,000 payable at the beginning of each year.The interest rate implicit in the lease is 10%, while the lessee'sincremental borrowing rate is 12%.Fact pattern9. The initial measurement of the right-of-use asset is determinedas follows: P10,000 x PV of an ordinary annuity of P1 @10%,n=4.10. The initial measurement of the lease liability is determined asfollows: P10,000 x PV of an annuity due of P1 @10%, n=4.

In case of sub-parts we are supposed to answer first 3 only 1) True . The lease are classified…

PROBLEM 1: TRUE OR FALS Jeases into a finance lease or an operating lease. control the use of an identified asset for a period of time in exchange for consideration. A lease that covers only the 1ª floor of a 10-storey building cannot qualify for accounting under PFRS 16 because the lessee does not have the right to obtain substantially all of the economic benefits of the entire building. nOenition and measurement approach

PROBLEM 1: TRUE OR FALS Jeases into a finance lease or an operating lease. control the use of an identified asset for a period of time in exchange for consideration. A lease that covers only the 1ª floor of a 10-storey building cannot qualify for accounting under PFRS 16 because the lessee does not have the right to obtain substantially all of the economic benefits of the entire building. nOenition and measurement approach

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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