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yes, to offset the losses.

I'm of the opinion that these costs should be considered in P&L, unless a reimbursement agreement comes to the table. Thank you, for your input. When time comes to discuss in depth with my colleagues I'll be better equipped. PS:The building construction is using the initial architectural plans.

Thank you Marek

I agree with your assessment and it's what I defend.

The construction is yet to finish, but at the moment there is no agreement to reimburse the architectural project fees.

Hey Guys I have about regarding the costs incurred by the lessee before the leae. IFRS clearly states that cost incurred, by the lessee should be treated iin accordance to IAS 16. My doubt is related to the architectural projects fees incurred before the lease, whether they should be recognized as a...

Thank you Marek

There is some difference but not substantial.

Hey Looking through the excel file examples, on the knowlwdge base, I figured that whenver the XIRR is computed to get the effective interest rate, the interst is calculated using the compound interst formula, rather than simple interest. This doubt came out when I was computing the interest rate im...

Thank's again.

Thank you for the reply. Exactly, the giving entity is not government and we are not in scope of IAS 20, nonetheless, I tried to take the same approach. As you said it's your asset and should be recognized immediately in P&L. Regarding the reason of the gifts, it's a state entity which develops ...

Hey Guys I have a question regarding the best approach in terms of accounting to fixed assets or other asset one can capitalize recieved as a gift. I have the following approach: D-Fixed assets C-Deferred Income H: Gift recieved from entity X D-Depreciation Fixed asset C-Accumulated depreciation H: ...

I would include the option in the lease liabilitly.

Unless the purchase option is exercised, the lease is extended/ celebrated a new contract ( technically it's not an obligatory extension, it's that there problably won't be another asset readily available at the end of the lease, so if we don't purchase we must extend). Because law sets a maximum te...

Regarding de discount rate of the lease, if we are closely working with the Fund lessor, there is no presumable restriction of informations. I assume we could in this case compute the rate implicit in the lease. There is a purchase option at the end of lease or an option to celebrate a new contract/...

Thank you Marek.
Exceptional orientation here.
Hope I can contribute better to the Forum in the future.

It's a brand new building, constructed with the assets of the Fund ( closed fund of the entity's employees), being this building the main asset of the Fund. Therefore to make sure the Pension Fund covers it's obligations, current and future, the lease payments were tied to the Fund's needs. Also, it...

I have a doutb regarding the type of payments this would be. We enter into a lease agreement and the payments are assumed to be variable. These variable payments are linked to a Pension Fund/ lessor anual obligations ( based on an actuarial valuation) during the lease term. That said once an actuari...

Much appreciated!

I checked with a jurist and they can't be combined.
There must be 2 lease liabilities in the contract, one for equipment at a maximum of 7 years and another one for the building up to 30 years.

In this case ther must be 2 separate discount rates.

Hey I'm back again I have this doubt. Let's say we enter to lease a fully equipped ( office equipment, etc) building for a term of 30 years and 3 mil. per year payment There is a r eal estate component and ther is office equipment component . The law states that for real estate leases the maximum te...

Exactly.
Precious information .

Even if you are to acquire the underlying assets at the end of lease? This is interesting beacuse according §32 of IFRS16 one applies IAS 16 to depreciate the right of use asset, and according to B32 of IFRS 16 it does not make sense to separate the land and the building. But IAS 16 §58 , states tha...

Hi Thank you for the insights. I concur with the idea to not separate the land and building, and treat such as a single right of use asset, but when it comes to depreciation I wouldn't depreciate the fraction that might be imputable to the land. Considering building and equipment there is guidance t...

I need assistance regarding IFRS 16 on Lease components separation on a lessee perspective. I have a situation concerning the lease of a building fully equipped. The right to use an underlying asset is a separate lease component if the criteria from (IFRS 16.B32) are met. 1)Does the criteria entails...