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Ifrs 16 Example Initial Measurement of Right-Of-use Asset and Lease Liability

This document provides an example of calculating the initial measurement of a right-of-use asset and lease liability under IFRS 16 for a lease that commences on January 1, 2001. It outlines the lease payments, discount rate, and schedules showing the annual opening and closing amounts for the lease liability and right-of-use asset over the 10 year lease term. The total lease payments are $515,000 and the initial lease liability and right-of-use asset are measured at $355,391 and $420,391, respectively.

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120 views4 pages

Ifrs 16 Example Initial Measurement of Right-Of-use Asset and Lease Liability

This document provides an example of calculating the initial measurement of a right-of-use asset and lease liability under IFRS 16 for a lease that commences on January 1, 2001. It outlines the lease payments, discount rate, and schedules showing the annual opening and closing amounts for the lease liability and right-of-use asset over the 10 year lease term. The total lease payments are $515,000 and the initial lease liability and right-of-use asset are measured at $355,391 and $420,391, respectively.

Uploaded by

aldwin006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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last updated: 1/20/2019

IFRS 16 example: initial measurement of the right-of-use asset and lease liability

Below are calculations accompanying the example available on IFRScommunity.com under direct link below:

https://ifrscommunity.com/knowledge-base/ifrs-16-recognition-and-measurement-of-leases/#link-ifrs_16_example_initia

On IFRScommunity.com, years are written as 20X1, 20X2 etc., but this changes to 2001, 2002 etc. whenever a spreadsheet
Hence this example starts in 2001, but is NOT outdated at all :)

1/1/2001 commencement date discount rate


5%
payments at the commencement of the lease
20,000 Initial direct costs
(5,000) Lease incentives
50,000 Upfront lease payment for year 2001

future payments
payment date of paymentdiscount factor discounted amount
1 50,000 1/1/2002 0.9524 47,619.05
2 50,000 1/1/2003 0.9070 45,351.47
3 50,000 1/1/2004 0.8638 43,191.88
4 50,000 1/1/2005 0.8227 41,135.12
5 50,000 1/1/2006 0.7835 39,176.31
6 50,000 1/1/2007 0.7462 37,310.77
7 50,000 1/1/2008 0.7107 35,534.07
8 50,000 1/1/2009 0.6768 33,841.97
9 50,000 1/1/2010 0.6446 32,230.45

Liability Schedule before reassessment of lease term


355,391.08 Lease liability at initial recognition

year opening (1 Jan) payment (1 Jan) discount


2001 355,391 - 17,770
2002 373,161 (50,000) 16,158
2003 339,319 (50,000) 14,466
2004 303,785 (50,000) 12,689
2005 266,474 (50,000) 10,824
2006 227,298 (50,000) 8,865
2007 186,162 (50,000) 6,808
2008 142,971 (50,000) 4,649
2009 97,619 (50,000) 2,381
2010 50,000 (50,000) -
om under direct link below:

nt-of-leases/#link-ifrs_16_example_initial_measurement_of_right-of-use_asset_and_lease_liability

2001, 2002 etc. whenever a spreadsheet formula needs a valid format date as an input.

Asset Schedule before reassessment of lease term


Lease liability at initial recognition 420,391 Gross book value of the righ-of use asset at initial recognition

closing (31 Dec) year NBV opening (1 Jan) depreciation


373,161 2001 420,391 (42,039)
339,319 2002 378,352 (42,039)
303,785 2003 336,313 (42,039)
266,474 2004 294,274 (42,039)
227,298 2005 252,235 (42,039)
186,162 2006 210,196 (42,039)
142,971 2007 168,156 (42,039)
97,619 2008 126,117 (42,039)
50,000 2009 84,078 (42,039)
- 2010 42,039 (42,039)

515,000 Total payments


420,391 Depreciation expense
94,609 Discounting expense
515,000 Total expense
lease term
use asset at initial recognition

NBV closing (31 Dec)


378,352
336,313
294,274
252,235
210,196
168,156
126,117
84,078
42,039
-

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