20 years: Chartered accountant & educator
In this video, Saket discusses what a lease is, services components that may accompany a lease, optional exemptions and sale and leaseback transactions. Be sure to watch part II of this series in which Saket further explains IFRS 16 leases.
In this video, Saket discusses what a lease is, services components that may accompany a lease, optional exemptions and sale and leaseback transactions. Be sure to watch part II of this series in which Saket further explains IFRS 16 leases.
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8 mins 55 secs
Leasing is a widely used financing solution. It enables entities to access and use property, plant and equipment without incurring large cash outflows at the start. Leases may have accompanying service components which have certain disclosure requirements under IFRS 16. Similarly, in a sale and leaseback transaction, the roles of the buyer and seller are essentially reversed.
Key learning objectives:
Describe a lease
Identify the requirements under IFRS 16 for both lease and service components
Describe the IFRS 16 optional exemptions
Define a sale and leaseback transaction
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A contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
If the customer has:
A sale and leaseback transaction is a financing arrangement where the owner sells an asset and retains access by entering into a lease on that same asset as a lessee. The seller becomes the lessee, and the buyer becomes the lessor. A sale and leaseback transaction arises when a sale occurs. If there is no sale, it must be accounted for as a financing transaction.
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