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7296 Points
Joined March 2019
Lessee: Operating & Finance Leases are both same.
RTU Asset a/c
To Current liability
To Non Current liability
(Asset recognised at cost equivalent to payments of principle and interest)
Depreciation a/c
To Fixed Asset a/c
(depreciation of asset)
Maintenance, Lease payments a/c
To Current liabilities a/c
(maintenance costs, expenses incurred and reconciled with current Liabilities)
Current Liability a/c
To cash a/c
(Lease payments met for current period)
Lessor: Finance Lease
Lease receivables a/c
To Lease Asset a/c
(Asset derecognised)
Lease receivables a/c
Direct costs
To Total Lease Income a/c
(recognising Lease accruals, direct costs included in investment receivables)
Cash a/c
To Lease receivables a/c
(when Lease instalments are met annually)
Lessor: Operating lease
Depreciation a/c
To Lease Asset a/c
(depreciation charged and impairment could be separately included if there is a need)
Lease Receivables a/c
Initial costs
Operating costs a/c
To Cash a/c
To Lease rental income a/c
(recognising receivables, Initial Lease contract expenses included in receivables and other expenses)
Cash a/c
To Lease Receivables a/c
(when Lease payments are met periodically)
The whole Lease income is recognised in SPLOCI- PL based on accruals and not in instalments.