AS 19 leases

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Student
23 Points Posted on 08 May 2020
whether unearned finance income for lessor Is profit or loss?
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On 08 May 2020 at 20:29 Report
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This discussion clarifies whether unearned finance income for a lessor under AS 19 leases is considered profit or loss. It confirms that under accrual accounting, lease rental receivables are recognised as income in the first year. Subsequent cash receipts reduce receivables and increase cash, consistently treating the income as profit.

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My grammar is 💯 good I
7306 Points Posted on 08 May 2020

Currently reporting is based on accruals. So assuming this is the case, all Lease rental receivables is recognised in the first year in income statement. Then, when cash on instalments is received, receivables will reduce and cash will increase. So, it will always be treated as a profit.

Cash 100

Receivables 200

To Lease rental 100

To unearned lease rental 200

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On 08 May 2020 at 21:22
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Student
23 Points Posted on 08 May 2020
Thanks
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On 08 May 2020 at 23:08

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