22 January 2011
What is Gross Investment in Lease as per AS-19 ? Is it (Minimum Lease Payment + Guaranteed Residual Value + Unguaranteed Residual Value)? Please answer for both: From lessor's point of view & Lessee's point of view
this formula is applicable only in the case of finance lease and in the books of lessor in the case of lesee as per the AS is the deemed onwer of the asset and he should recognise the leased asset at the lower of Fair valu or Present value of MLP (lessee's view) whichever is less
formule for finance lease in lessors books gross investment =MLP+unguarenteed residual value(UgRV)
MLP= total lease rent and the guarenteed residual value (GRV) by lessee and third party
so formule in your query is a duplication of GRV. in simple the GI= total lease rent + GRV+UgRV
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