How is lease treated by AS when the transaction is done by a company involved in real estate business and when it is a company involved in some other business. eg. Suppose X comapny owns a building, it deals with medical equipment business it leases it second floor to law firm. how will this transaction be treated from on both their accounts.?
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Accounting treatment of lease
Replies (3)
when the company is in real estate business then according to AS19 it will be Finance Lease because at the end of the lease period the ownership is transferred to the buyer. And in case of other companies it will be dependent on the transaction or agreement...
AGREED WITH SWATI
it will be operational lease...
refer accounting treatment given under AS 19
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