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Leases, Year
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Leases
Definitions
Lease
a contract, or part of, that conveys the right to use an asset for a period of time in exchange for "consideration" (payment)
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Lessee accounting
Entity cannot afford to pay for asset outright, and instead has a lease agreement where it pays off the asset cost with its monthly rental charge
At the commencement of the lease, the lessee should recognize a lease liability, and a right to use asset
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If the lease is a short term (< 12 months) or of low value e.g. mobile phone contract, lessee can choose to recognize the lease payments in SPL as an expense only with no lease liability or right of use asset
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