Lecture was good. but few things are skipped.. like allocation of each lease payment into interest and depreciation and treatment for initial cost involved (as per the example: 80K)
Another query is if a free parking is also allocated with leased out property ,which are usually free parking with each property,whether we need to seperate out rent portion for property and parking and book as sperate lease liability and right to use for that seperately.
+honey khandelwal not sure. But putting the parking as a part of right to use may be fine as a single asset. I may think of it like this whether the right to use the property is separated from right to use the parking for any practical purposes
Very nice explanation.If all payment is done while booking lease there will not be any lease liability and interest expense but right to use asset amortisation will be there till lease end. Kindly correct me if I am wrong.
Sir, do we need to deduct cash inflow.. For f. G.. In case of car lease payments.. We are paying rentals to lessor and out of that for 1 car we are recharging to our unit
The lease payments are made towards the leaee liability. This includes both the value of car and also interest arising over the period. So.. the way I understand the question.. any payments should be reduced. Not sure what inflow you had referred to
It is my two cents, as on viewers' perspective, if you demonstrate end-to-end solution it will worth more as some calculations and entries were missing such as interest and Dep it is also ok viewers should look into others videos of yours for those entire, but then its little challenging relating two or more videos and the understanding part get more difficult as a consequent viewer go look for other sites for quick learning. My recommendation is to make one video with an end-to-end solution with a sequence number that will be very helpful.
Why can't we recognise it as lease receivable(Debtors) because once the lease paid in full the lessor is liable to pay back the money because the leased assets will be not used as yet... For instance, If it happens that the lease is cancelled and the lease penalty is paid and the balance left, the lessor will be then obligated to pay back the remaining balance
Hi, its great session. I have some query regarding Lessor's accounting in case of operating lease. lets say its operting lease, lessor will also book asset and claim depreciation and now as per IFRS 16, lessee will also book asset and claim depreciation. Is it double booking of assets and depreciation.
Thanks for prompt reply!!! But its double booking of depreciation and Lessor's profit is not correct in this way and even Lessor's investor also have not getting fully informed that particular asset is not belong to Lessor.
How will perpetual leased land agreement for 99 years entered with local govt. authority be treated in the books. Following is the details Payment towards lease land had been done in one time at the time of commencement of lease deed. There is only annual recurring payment being maid to govt. authority which is 2.5% of lease amount paid at the time time of allotment.
Sir your classes are very helpful and good way to get knowledge...😀✌️ I have some doubts to ask.... Will accounting i.e Journal entries be same as you have told in this video even in case of operating lease? And who would charge depreciation in OL , lessor or leasse?? And sir one more thing how entries/treatment would differ under US GAAP for OL? Thank you & keep posting these videos sir...
I'd like to thank you very much for the useful session.
Hello. Nice video and explanations. Just a quick comment. The Right of Use asset value is 3,580,000 and not 4,3m...right?
Excellent video very helpful. The only recommendation is to use real values for a better context on accounting impact
Thanks Tarun. Will replace the lecture with precise detailed calculations and entries
Too much understanding way of explaining things. Thanku sir
Thanks for such detailed explanation that was very helpful.
Very useful lecture..... Very well Explained in a simple way
Lecture was good. but few things are skipped.. like allocation of each lease payment into interest and depreciation and treatment for initial cost involved (as per the example: 80K)
A superb class indeed. Really helped me with my understanding
Many thanks..
Excellent sir...
Sir, have you record any session on Embedded lease as per new ifrs-16 rule?
Thanks sir.. good class. One opinion is better to use correct figures always than assumed figure
Many thanks... sure to follow the advice
How to take this effect from retrospective date and prior period calculation ?
Another query is if a free parking is also allocated with leased out property ,which are usually free parking with each property,whether we need to seperate out rent portion for property and parking and book as sperate lease liability and right to use for that seperately.
+honey khandelwal not sure. But putting the parking as a part of right to use may be fine as a single asset. I may think of it like this whether the right to use the property is separated from right to use the parking for any practical purposes
Excellent 👍
i though the original value lease at inception is USD 3,580,000 instead of 4,300,000
Very nice explanation.If all payment is done while booking lease there will not be any lease liability and interest expense but right to use asset amortisation will be there till lease end.
Kindly correct me if I am wrong.
+honey khandelwal yes.. that's the right understanding
Great stuff. Thank you
Many thanks
Sir, I have a question, for interest which comes from lease liability, could we consider it as operating expense or finance expense at P/L?
Its always a finance cost considering the fact the lease is considered to be a financing arrangement
@@AVCLearning much thankyou si
the value of the use of asset is$ 3.580.000, not $4.300.00 is this correct? ......nice session
+Abu Shama yea.. the calculation was mistakenly done like that. Thanks for raising.
Sir, do we need to deduct cash inflow.. For f. G.. In case of car lease payments.. We are paying rentals to lessor and out of that for 1 car we are recharging to our unit
The lease payments are made towards the leaee liability. This includes both the value of car and also interest arising over the period. So.. the way I understand the question.. any payments should be reduced. Not sure what inflow you had referred to
Sir can you give number to your lectures. So that its easy to continue with the series.
Very well explained..
very nice presentation,
It is my two cents, as on viewers' perspective, if you demonstrate end-to-end solution it will worth more as some calculations and entries were missing such as interest and Dep it is also ok viewers should look into others videos of yours for those entire, but then its little challenging relating two or more videos and the understanding part get more difficult as a consequent viewer go look for other sites for quick learning. My recommendation is to make one video with an end-to-end solution with a sequence number that will be very helpful.
What if the lesse paid the full amount to the lessor for the 10years. Do you still recognize any lease liability
The lease liability becomes nil since everything is paid already. Only the RoU asset is recognized in financial statements
Why can't we recognise it as lease receivable(Debtors) because once the lease paid in full the lessor is liable to pay back the money because the leased assets will be not used as yet... For instance, If it happens that the lease is cancelled and the lease penalty is paid and the balance left, the lessor will be then obligated to pay back the remaining balance
hi, could you please explain why we have taken 8% from 5th year? whereas the change of $600,00 was from 11th year.
Hi. Please allow me to revise the entire set of lectures on leases. You should see more specific numbers on the concept
Because you entered into option after 4 years . So you need to do the remeasurement after 4 years.
Aren’t prepayments recognized as part of right of use asset ?
These are a part or ROU assets. These just get adjusted from the lease liability.
Hi, its great session. I have some query regarding Lessor's accounting in case of operating lease. lets say its operting lease, lessor will also book asset and claim depreciation and now as per IFRS 16, lessee will also book asset and claim depreciation. Is it double booking of assets and depreciation.
Yes. In many instances, the asset is booked by both entities.
Thanks for prompt reply!!! But its double booking of depreciation and Lessor's profit is not correct in this way and even Lessor's investor also have not getting fully informed that particular asset is not belong to Lessor.
The disclosures give a reference. But Yes, double booking is possible
How will perpetual leased land agreement for 99 years entered with local govt. authority be treated in the books. Following is the details
Payment towards lease land had been done in one time at the time of commencement of lease deed. There is only annual recurring payment being maid to govt. authority which is 2.5% of lease amount paid at the time time of allotment.
It needs to be assessed first whether its a grant in nature. The accounting changes altogether in that case
@@AVCLearning Thank you very much..sir
Hello Sir, your training sessions are good, can you also plz provide some highlights on IFRS 10
Great video
Thank you so much
good lecture better experience at 1.75x tempo.
Hi, pls number the videos (standard wise) so it can be seen in order. Great videos👍
Many thanks 😊
it was a very informative session
How it will become 4.3 Million (30+5+.80)= 3.58 milliom only
Thankful for the english language sir.
Many thanks
Dear trainer
Your lecture so helpful but you requested by me pls. give lecture differences between IAS 17 &IFRS 16 with exemple.
Many thanks for the reply
Thanks sir.
Hi sir , Whether 500,000includes interest
The payment of 500,000 includes both principal and interest as instalment
How the. Lease liability will reduce
As and when you repay... the liability gets reduced
Sir your classes are very helpful and good way to get knowledge...😀✌️
I have some doubts to ask....
Will accounting i.e Journal entries be same as you have told in this video even in case of operating lease?
And who would charge depreciation in OL , lessor or leasse??
And sir one more thing how entries/treatment would differ under US GAAP for OL?
Thank you & keep posting these videos sir...
+Rahul Singhvi if that's an operating lease, the lessor shows rental income and the lessee shows expense. Depreciation is available with lessor.
AVC Learning Solutions thank you sir.
3.58M
@15:40 it should be $3,580,000 not $4,300,000 because @ 5:30 you say set up costs are $80k not $800k, but otherwise nice video
+Nish Sotheeswaran thanks and apologies if I made a totalling mistake 🤔🤔🤔🤔
Agree. ROU Asset value is $ 3.58 million
These types of simple mistakes get us accountants fired hahaha. Thanks for the explanation!
Too much noise