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Chapter 9

Lessee accounting

2.1 Measurement

At inception

of lease
recognise

Right-of-use
Lease liability
asset

Recognise at present value of Recognise at cost, which

payments not yet made: equals:

 Fixed payments  Initial value of lease

liability
 Amounts expected to be

paid under residual  Payments made at or
value guarantees before commencement

 Options to purchase that  Initial direct costs
are reasonably certain to

be exercised  Estimated costs of asset
removal or dismantling
 Termination penalties if as per lease conditions
lease term reflects
expectation that they will
be incurred.

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