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CHAPTER 16 PFRS 16 - LEASES, MENGER SIMON PINO - Coggle Diagram
CHAPTER 16 PFRS 16 - LEASES
Single Lessee Model:
Capitalization
of
Leases
: Most leases with a term of more than 12 months must be capitalized.
Right-of-Use Asset
: Lessees recognize a right-of-use asset representing their right to use the leased asset.
Lease
Liability
: Lessees recognize a lease liability representing their obligation to make future lease payments.
Lease Classification:
Short-Term Leases:
Leases with a term of 12 months or less are exempt from capitalization.
Low-Value Leases:
Leases of assets with a low value are exempt from capitalization.
Measurement of Lease Liability
Present
Value
of **
Lease
Payments**: The lease liability is initially measured at the present value of lease payments over the lease term, discounted at the implicit rate or the lessee's incremental borrowing rate.
Measurement of Right-of-Use Asset:
Initial
Measurement
: The right-of-use asset is initially measured at cost, which includes:
The initial measurement of the lease liability
Payments made at or before the commencement date
Initial direct costs incurred by the lessee
Subsequent
Measurement
: The right-of-use asset is subsequently measured at cost less accumulated depreciation and impairment losses.
Reassessment of Lease Term
Extension
Options
: If the lessee has an option to extend the lease term, it is included in the lease term if it is reasonably certain to be exercised.
Termination
Options
: If the lessee has an option to terminate the lease, it is considered if it is reasonably certain to be exercised.
MENGER SIMON PINO
GROUP 7
9:00 - 10:30
BSA 1