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Short Term Lease
 
Hi
Please tell me what is short term lease. previously i heared only finance lease and operating lease.
 
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
 
When a lessor will de recognize the asset?
 
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.
 
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.
 
What are the latest proposed changes in lease accounting specially from the point of view of Lessor?
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