IFRS 16 Finance Lease in the books of Lessor

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Yasaswi Gomes
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Joined: 18 Apr 2020, 15:44

IFRS 16 Finance Lease in the books of Lessor

Post by Yasaswi Gomes »

Hi,

Can someone help me with the journals for finance component and capital component lease rental receivables.

Lease Receivables a/c 10,000
To Lease Asset a/c 10,000

after de-recognising the asset like above, I have done the below

Lease receivables a/c 10,000- reconciled this from above entry
Add: Any initial costs 0
To Total Lease Income a/c 10,000

In the above entry, I have recognised the entire PV of Lease receivables which includes Interest+Capital. This is the same PV of Lease payments in Lessee’s book (Current liability+Non-Current liability= 10,000)

My question is, can I recognised the total lease Interest + Capital in SPLOCI-PL Cr.? Then when the cash payments are received, I will credit receivables e.g., 200 Interest+ 800 Capital elements annually.

Cash a/c 1000
To Lease Receivables a/c 1000- until the balance is Nil.

Or should I classify interest received and capital received separately? If so, can you please pass on the entries?

Txs.
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Marek Muc
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Re: IFRS 16 Finance Lease in the books of Lessor

Post by Marek Muc »

Hi, an example with entries is available here:
https://ifrscommunity.com/knowledge-bas ... ance-lease

to be honest, I don't understand your question, but hopefully the example above will help you
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