Short Term Lease

Accounting Problems User Posts: 27 Joined: 27/09/2011	#1 30/09/2011 04:14 Hi Please tell me what is short term lease. previously i heared only finance lease and operating lease.

Rafi Guest	#2 30/09/2011 06:24 by defination short term lease is a lease that, at the date of commencement of the lease, has a maximum possible lease term, including options to renew or extend, of twelve months or less

John Guest	#3 01/10/2011 06:52 When a lessor will de recognize the asset?

Muhammad Zargham Haider User Posts: 32 Joined: 27/09/2011	#4 01/10/2011 08:15 at the date of commencement of the lease, a lessor would recognise lease income representing the present value of the lease payments and lease expense representing the cost of the portion of the asset derecognized.

Muhammad Zargham Haider

User

Posts: 32 Joined: 27/09/2011

02/10/2011 08:47

adding to previous
The portion of the underlying asset derecognised would be calculated at the date of inception of the lease as follows:
(Fair value of the right to receive lease payments x Carrying amount of the underlying asset) / Fair value of the underlying asset
The remaining portion of the underlying asset that is not derecognised would be reclassified as the residual asset.

Billy Guest	#6 10/10/2011 04:19 What are the latest proposed changes in lease accounting specially from the point of view of Lessor?

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