Page 141 - IC26 LIFE INSURANCE FINANCE
P. 141
ACCOUNTING STANDARDS – 19
LEASES
Applicability:- Mandatory for all enterprises w.e.f. 1.04.2001.
It should be applied in accounting for all leases other than:
a) lease agreements to explore for or use natural resources;
b) licensing agreements for items such as plays, manuscripts, patents and copyrights; and
c) lease agreements to use lands.
Lease : A lease is an agreement whereby the lessor conveys to the lessee in return for a
payment or series of payments the right to use an asset for an agreed period of time.
Finance Lease : All risks and rewards incident to ownership of an asset is transferred.
Operating Lease : Lease other than finance lease; i.e. which does not transfer all the risk and
reward incidental to ownership.
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