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    Measurement by A Lessee and Accounting For A Change in The Lease Term

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    Jhon Sudiarman
    Lessee enters into a 10-year lease with an option to extend for five years. Lease payments are CU50,000 per year initially and CU55,000 if extended. Lessee incurs initial direct costs of CU20,000 and receives a CU5,000 lease incentive from Lessor. At commencement, Lessee concludes extension is not reasonably certain and determines the lease term is 10 years. The incremental borrowing rate is 5% annually. Lessee initially recognizes a CU405,391 right-of-use asset and CU355,391 lease liability, accounting separately for initial costs and incentives received.

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    Measurement by A Lessee and Accounting For A Change in The Lease Term

    Uploaded by

    Jhon Sudiarman
    38 views3 pages
    Lessee enters into a 10-year lease with an option to extend for five years. Lease payments are CU50,000 per year initially and CU55,000 if extended. Lessee incurs initial direct costs of CU20,000 and receives a CU5,000 lease incentive from Lessor. At commencement, Lessee concludes extension is not reasonably certain and determines the lease term is 10 years. The incremental borrowing rate is 5% annually. Lessee initially recognizes a CU405,391 right-of-use asset and CU355,391 lease liability, accounting separately for initial costs and incentives received.

    Original Description:

    Jurnal PSAK 73

    Original Title

    Jurnal PSAK 73

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    Lessee enters into a 10-year lease with an option to extend for five years. Lease payments are CU50,000 per year initially and CU55,000 if extended. Lessee incurs initial direct costs of CU20,000 and receives a CU5,000 lease incentive from Lessor. At commencement, Lessee concludes extension is not reasonably certain and determines the lease term is 10 years. The incremental borrowing rate is 5% annually. Lessee initially recognizes a CU405,391 right-of-use asset and CU355,391 lease liability, accounting separately for initial costs and incentives received.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    38 views3 pages

    Measurement by A Lessee and Accounting For A Change in The Lease Term

    Uploaded by

    Jhon Sudiarman
    Lessee enters into a 10-year lease with an option to extend for five years. Lease payments are CU50,000 per year initially and CU55,000 if extended. Lessee incurs initial direct costs of CU20,000 and receives a CU5,000 lease incentive from Lessor. At commencement, Lessee concludes extension is not reasonably certain and determines the lease term is 10 years. The incremental borrowing rate is 5% annually. Lessee initially recognizes a CU405,391 right-of-use asset and CU355,391 lease liability, accounting separately for initial costs and incentives received.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    Measurement by a lessee and accounting for a change in the lease term

    Part 1–Initial measurement of the right-of-use asset and the lease liability
    Lessee enters into a 10-year lease of a floor of a building, with an option to extend for five years.
    Lease payments are CU50,000 per year during the initial term and CU55,000 per year during the optional period, all paya
    To obtain the lease, Lessee incurs initial direct costs of CU20,000, of which CU15,000 relates to a payment to a former ten
    As an incentive to Lessee for entering into the lease, Lessor agrees to reimburse to Lessee the real estate commission of C

    At the commencement date, Lessee concludes that it is not reasonably certain to exercise the option to extend the lease a

    The interest rate implicit in the lease is not readily determinable. Lessee’s incremental borrowing rate is 5 per cent per an
    which reflects the fixed rate at which Lessee could borrow an amount similar to the value of the right-of-use asset, in th

    At the commencement date, Lessee makes the lease payment for the first year, incurs initial direct costs,
    receives lease incentives from Lessor and measures the lease liability at the present value of the remaining nine payment
    discounted at the interest rate of 5 per cent per annum, which is CU355,391.

    Lessee initially recognises assets and liabilities in relation to the lease as follows.
    Lessee accounts for the r
    Right-of-use asset CU405,391 This is because costs incu
    Lease liability CU355,391
    Cash (lease payment for the first year) CU50,000
    Right-of-use asset CU20,000
    Cash (initial direct costs) CU20,000
    Cash (lease incentive) CU5,000
    Right-of-use asset CU5,000

    Dr Depreciation
    Cr Accumulated Depreciation - Building
    Recognize ROU depreciation

    Dr Lease liability - current


    Dr Interest Expense
    Cr Cash
    Amortization of lease liability

    Dr Lease liability - noncurrent


    Cr Lease liability - current
    Reclass short-term portion

    Dr Deferred tax asset


    Cr Deferred income tax
    Recognize deferred tax expense
    he lease term

    e optional period, all payable at the beginning of each year.


    a payment to a former tenant occupying that floor of the building and CU5,000 relates to a commission paid to the real estate agent th
    al estate commission of CU5,000 and Lessee’s leasehold improvements of CU7,000.

    tion to extend the lease and, therefore, determines that the lease term is 10 years.
    The company has to determine the in
    defined as 'The rate of interest that a
    g rate is 5 per cent per annum, to borrow over a similar term, and w
    e right-of-use asset, in the same currency, for a 10-year term, and with similar collateral. funds necessary to obtain an asset of
    right‑of‑use asset in a similar econom

    remaining nine payments of CU50,000,

    Lessee accounts for the reimbursement of leasehold improvements from Lessor applying other relevant Standards and not as a lease
    This is because costs incurred on leasehold improvements by Lessee are not included within the cost of the right-of-use asset
    to the real estate agent that arranged the lease.

    ny has to determine the incremental borrowing rate,


    The rate of interest that a lessee would have to pay
    over a similar term, and with a similar security, the
    ssary to obtain an asset of a similar value to the
    e asset in a similar economic environment. 

    ndards and not as a lease incentive applying  IFRS 16.


    right-of-use asset

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