Level 4 aat leases IFRS 16
Bubblechuk
Registered Posts: 1 New contributor 🐸
Hello!
I am currently self studying level 4 and I’m grasping it really well so far…
Until I got to leases…
I’m using BPP to study and their examples show lease liability broken down into NCL & CL and not recognised solely as a NCL.
My question is, why is it broken down into these subcategories?
Example:
Y1
10,000 (PVFLP)
920 (Interest rate Implicit)
(2000) (Payment)
=8920
Y2
8920
821
(2000)
=7741
8920 - 7741 = 1179 (current liability)
Working out Y3 onwards, the balance in the CL account will increase. Since this liability is recognised more than 1 period, would this stay as a CL?
I am currently self studying level 4 and I’m grasping it really well so far…
Until I got to leases…
I’m using BPP to study and their examples show lease liability broken down into NCL & CL and not recognised solely as a NCL.
My question is, why is it broken down into these subcategories?
Example:
Y1
10,000 (PVFLP)
920 (Interest rate Implicit)
(2000) (Payment)
=8920
Y2
8920
821
(2000)
=7741
8920 - 7741 = 1179 (current liability)
Working out Y3 onwards, the balance in the CL account will increase. Since this liability is recognised more than 1 period, would this stay as a CL?
0
Comments
-
Hi @Bubblechuk
Not too sure of your question but based on my understanding for IFRS 16 Leases. In order to work out year 3 it would be as follows :
£7,741 - PV
£713 - Implicit Rate (based on 9.2%)
(£2,000) - Yearly Payment Charge
£6,454
So £7,741 - £6,454 = £1,287 would be recognised in the Current Liabilities
Are you able to confirm this is what they have in the BPP Book too?
Many thanks
Shamil
0
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