IFRScommunity.com

Hi guys,

1. Is that possible to give me a very simple example of the accounting of a finance lease by lessor ?

I'm asking this question because I see that in some companies, in their P&L, there is a separate line called "Interest revenue from finance lease calculated using the effective interest method" in the total revenue. I just want to have some practical example with Dt/Cr so I can understand better.

2. How do you interprete this in practice "When the difference between the gross receivable and the present value of the receivable is recognized as revenue during the lease phase. The lease contract is recognized over the terme of the lease using the net investment method, which reflects a constant periodic rate of return" ?


Thank you very much.


Best regards !

1. https://ifrscommunity.com/knowledge-bas ... easurement

2. which paragraph is it?

Hi Marek,

Thank you very much for the accounting scheme.

I do have a last question, does it mean that at the commencement date the company have to recognise almost all the revenue at first ? During the subsequent periods, only interest income will be recognised in revenue?

thanks

yes, finance lease is more like a sale, not a rental

it's revenue and expense, or gain on disposal of assets, depending on the activity profile of the entity

https://ifrscommunity.com/knowledge-bas ... er-lessors

very insightful as always !

Thank you