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Lease- part 2 - Coggle Diagram

- - - - Derecognise the asset
      - Recognise ROU asset measured at the proportion of the previous CA that relates to the right of use retained
      - Gain or loss are recognised in the seller-lessee's FS in relation to the rights transferred to the buyer-lessor
      - Sale proceeds are adjusted to FV
        
        Why
        
        If consideration received for the sale does not equal to that asset's FV
        
        If lease payments are not equal to the market rates
        
        How
        
        Below-market terms
        
        The diff. are accounted for as prepayments of lease payments and so is added to the ROU asset as per normal IFRS 16 treatment for initial measurement of a ROU
        
        Above-market terms
        
        The diff. is treated as additional financing provided by the buyer-lessor to the seller-lessee
      - Lease liability
        
        Originally recorded at the PV of lease payments. This amount is split between
        
        The PV of lease payments at market rates
        
        The additional financing(the diff.) which is in substance a loan
    - - Accounts for the purchase as a normal purchase and for the lease in accordance with IFRS 16
  - - - Continues to recognise the transferred asset and recognises a financial liability equal to the transfer proceeds
    - - Does not recognise the transferred asset
      - Recognise a financial asset (IFRS 9) equal to the transfer proceeds
- - - - Net investment in the lease
        
        PV of lease payments receivable by the lessor PLUS PV of any unguaranteed residual value accruing to the lessor
        
        An unguaranteed residual value arises where a lessor expects to be able to sell an asset at the end of the lease term for more than the min amount guaranteed by the lessee in the lease contract