Page 428 - F2 Integrated Workbook STUDENT 2019
P. 428
Chapter 19
Chapter 6
Example 6.1
The lease term is three years. This is because the option to extend the lease is
reasonably certain to be exercised.
The lease liability is calculated as follows:
Cash flow Discount Present value
Date $ rate $
31/12/X1 10,000 1/1.05 9,524
31/12/X2 10,000 1/1.05 2 9,070
31/12/X3 15,000 1/1.05 3 12,958
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31,552
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The initial cost of the right-of-use asset is calculated as follows:
$
Initial liability value 31,552
Direct costs 3,000
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34,552
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