FAC3762 - Leases (Lessor)

Leases - Lessor Accounting

Journal entries:

Date Description Debit
1. Initial recognition (par 67 & 70)
Gross Investment (SFP) -
Unearned finance income (SFP)
VAT (SFP)
Underlying asset - Cost (SFP)
Underlying asset - Accumulated depreciation (SFP) -
Loss/Profit on disposal (PL) -

2. Intial direct cost (par 69)
Gross investment (SFP) -
Bank (SFP)

3. Receive instalments (par 76)
Bank (SFP) -
Gross investment (SFP)

4. Recognise finance income (par 75)
Unearned finance income (SPF) -
Finance income (PL)

5. Accrued finance income CY
Unearned finance income (SFP) -
Finance income (PL)

6. Accrued finance income PY
Finance income (PL) -
Unearned finance income (SFP)

7. Deferred taxation
Deferred Tax (SFP/ PL) -
Deferred Tax (SFP/ PL)
-

Disclosure:

XXX Ltd.
Notes to the annual financial statements for the year ended XXX
R
XXX

1. Profit before tax
Profit before tax is stated after taking the following into account:

, Income
Finance income on net investment in finance lease
Finance lease income
Commencement gain/loss
Income from variable lease payments

2. Income tax expense
Major components of tax expense
SA normal tax
Current tax
- current year
Defrred tax
-movement in temporary differences
-
Tax reconciliation
Accounting profit
Tax at 28% -

3. Net investment in finance lease
3.1 Nature of leasing activities and risk management strategy
- General description of material leasing arrangement
- unguaranteed residual values
- Contingent rentals

3.2 Reconciliation of net investment in finance lease
Opening Balance
New leases entered into
Repayments of capital -
Payments
Interest
Effect of lease modification
Closing balance -

5.3 Maturity analysis of finance lease payments to be received at reporting date

Unearned
Undiscounted lease payments finance
income

2017
2018
2019
2020
2021
After 2021