Page 429 - F2 Integrated Workbook STUDENT 2019

Answers

Example 6.2

(i) Arrears (ii) Advance
$000 $000
Statement of profit or loss (extract)
Depreciation 922 (W2) 918 (W4)

Finance cost 319 (W1) 387 (W3)

Statement of financial position (extract)
Right-of-use asset 3,686 (W2) 3,671 (W4)

Non-current Liabilities
Lease liability 2,577 (W1) 2,361 (W3)
Restoration provision 65 65

Current lease liability 735 (W1) 1,000 (W3)

Workings

(i) Arrears:

Initial recognition

Lease liability

Initial recognition at present value of lease payments still to be paid.

Rental payments $1,000,000 for 5 years discounted at 8%.

$1,000k × 3.993 = $3.993k

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