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Leases

Per IAS 17 Leases, the accounting consists of 2 main steps.

(1) The asset is derecognised and any gain or loss on disposal is deferred over the
lease term

 To derecognise the asset:

Dr Cash

Cr PPE

Cr Deferred Income

 To release deferred income over lease term

Dr Deferred Income

Cr P/L

(2) Record as a finance lease (using 4 steps as per section 1.2)

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