siddharth (student) (24 Points)
07 July 2011How 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.?
Swati
(Partner at BIDS & Co.)
(51 Points)
Replied 07 July 2011
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...
Anvesh Desai
(Chartered Accountant)
(156 Points)
Replied 08 July 2011
it will be operational lease...
refer accounting treatment given under AS 19
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