Page 430 - F2 Integrated Workbook STUDENT 2019
P. 430
Chapter 19
Example 6.2 continued
Right-of-use asset
Initial recognition at cost = lease liability plus previous payments already
incurred plus initial direct costs.
$000
Lease liability 3,993
Deposit 500
Direct costs 50
Restoration costs 65
––––––
Right-of-use asset 4,608
Double entry (in $000)
Dr Right-of-use asset 4,608
Cr Lease liability 3,993
Cr Cash 550
Cr Restoration provision 65 (per IAS 37)
Subsequent treatment
(W1) Lease liability – Add interest and subtract lease repayment
Year Opening Interest 8% Payment Closing
$000 $000 $000 $000
1 3,993 319 (1,000) 3,312
2 3,312 265 (1,000) 2,577
Current liability = $3,312k – $2,577k = $735k
Non-current liability = Amount owing at end of year 2 =$ 2,577k
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