PPT: Accounting Standards (19) | Advanced Accounting for CA Intermediate PDF Download

 Page 1


Objective
The objective of this standard is to prescribe accounting 
treatment for Leases
&
disclosures in relation to Financial and Operating 
Leases.
Page 2


Objective
The objective of this standard is to prescribe accounting 
treatment for Leases
&
disclosures in relation to Financial and Operating 
Leases.
Scope
? This standard applies to all leases except:-
a) Lease rights to explore for or use of natural resources, 
such as oil, gas and other mineral rights, 
b) Leases of motion pictures and
c) Lease agreement to use land.
Page 3


Objective
The objective of this standard is to prescribe accounting 
treatment for Leases
&
disclosures in relation to Financial and Operating 
Leases.
Scope
? This standard applies to all leases except:-
a) Lease rights to explore for or use of natural resources, 
such as oil, gas and other mineral rights, 
b) Leases of motion pictures and
c) Lease agreement to use land.
Definitions
? Lease:- Agreement between two parties where one party 
obtains right to use asset against consideration or series of 
consideration for an agreed period of time.
Lessee Lessor
Consideration for using asset
Right to use asset
Lease
Page 4


Objective
The objective of this standard is to prescribe accounting 
treatment for Leases
&
disclosures in relation to Financial and Operating 
Leases.
Scope
? This standard applies to all leases except:-
a) Lease rights to explore for or use of natural resources, 
such as oil, gas and other mineral rights, 
b) Leases of motion pictures and
c) Lease agreement to use land.
Definitions
? Lease:- Agreement between two parties where one party 
obtains right to use asset against consideration or series of 
consideration for an agreed period of time.
Lessee Lessor
Consideration for using asset
Right to use asset
Lease
Cont.
? Lease term: The non cancellable period for which the 
lessee has agreed to  take on lease the asset together with 
any further period for which the lessee has to continue the 
lease of the asset.
? Minimum Lease Payment: The amount which is required to 
pay by lessee over the lease term including any guaranteed 
residual value, but excluding any contingent rent or 
expense which are reimbursed by lessor.
Page 5


Objective
The objective of this standard is to prescribe accounting 
treatment for Leases
&
disclosures in relation to Financial and Operating 
Leases.
Scope
? This standard applies to all leases except:-
a) Lease rights to explore for or use of natural resources, 
such as oil, gas and other mineral rights, 
b) Leases of motion pictures and
c) Lease agreement to use land.
Definitions
? Lease:- Agreement between two parties where one party 
obtains right to use asset against consideration or series of 
consideration for an agreed period of time.
Lessee Lessor
Consideration for using asset
Right to use asset
Lease
Cont.
? Lease term: The non cancellable period for which the 
lessee has agreed to  take on lease the asset together with 
any further period for which the lessee has to continue the 
lease of the asset.
? Minimum Lease Payment: The amount which is required to 
pay by lessee over the lease term including any guaranteed 
residual value, but excluding any contingent rent or 
expense which are reimbursed by lessor.
Cont.
? Fair Value: The amount for which an asset can be 
exchanged or a liability settled between knowledgeable, 
willing parties in an arm’s length transaction.
? Contingent rent: A portion of lease payment which is based 
on a factor such as percentage of sales etc.