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Leases means good business sense to many business-men. Leases provide most convenient mode of financing assets.

Leases means good business sense to many business-men. Leases provide most convenient mode of financing assets.

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  • A RELIABLE AND A GENUINE PROVIDER THAT CAN DELIVER BANK GUARANTEE AND OTHER FORM OF BANKING INSTRUMENTS FOR LEASE WHICH ARE MAINLY FRESH CUT.

    Bank instruments which are cash backed can be used as thus; clients looking for loans to finance their businesses also serve as a collateral to get loans from banks in other to engage into any project at hand further details will be emailed upon request.

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  • 1. [In accordance with the requirements of IAS 17 & FASB Statement 13] Ahmad Tariq Bhatti FCMA, FPA, MA (Economics), BSc Dubai, United Arab Emirates
  • 2. Program Details1. Lease assets2. Key concepts3. Classification4. Definitions5. Calculations6. Accounting7. Advantages & disadvantages8. Glossary9. Appendix A: Leasing Soft-wares10. References Leases 2
  • 3. Lease Assets Leases 3
  • 4. Key ConceptsA lease is an agreement whereby a lessor conveys to a lessee, in return for apayment or series of payments, the right to use an asset for an agreed period oftime.A finance lease is an agreement that transfers substantially all risks and rewardsincidental to ownership of an asset. Title may or may not eventually betransferred.A non-cancellable lease is a lease that is cancellable only: Upon the occurrence of some remote contingency, With the permission of the lessor, If a lease enters into a new agreement for the same or an equivalent asset with the same lessor; or Upon payment by a lessee of such an additional amount that, at inception of the lease, continuation of the lease is reasonably certain. The commencement of a lease term is a date from which a lessee is entitled toexercise the right to use leased assets.The lease term is a non-cancellable period for which a lessee has signed anagreement to lease an asset. Leases 4
  • 5. Key ConceptsMinimum Lease Payments (MLPs) are payments over a lease term that alessee is or can be required to make, excluding contingent rents, costs forservices and taxes to be paid by and reimbursed to a lessor together with: For a lessee, any amounts guaranteed by him or by a party related to the lessee For a lessor, any GRV to the lessor by:  The lessee  A party related to the lessee or  3rd party guarantor unrelated to the lessorFair Value (FV) is an amount for which an asset could be exchanged, or aliability settled, between knowledgeable willing parties, in an arm’s lengthtransaction.Economic life (EL) is either: The period over which an asset is expected to be economically usable by one or more users; or The number of production or similar units expected to be obtained from an asset by one or more users. Leases 5
  • 6. Key ConceptsUnguaranteed residual value (UGRV) is that portion of RV of a leasedasset, realization of which by a lessor is not assured or is guaranteed solelyby a party related to a lessor.Guaranteed residual value (GRV) is: For a lessee, that part of RV that is guaranteed by a lessee and For a lessor, that part of RV that is guaranteed by a lessee or a 3rd party guarantorGross investment in a lease asset is the aggregate of: MLPs receivable by a lessor under a finance lease, and Any UGRV accruing to a lessor.Net investment in a lease asset is gross investment in a lease discounted atthe required interest rate of a lessor.Initial Direct Costs (IDCs) are costs that are directly attributable tonegotiating and arranging a lease.Useful life is an estimated remaining period, from commencement of alease term, without limitation by a lease term, over which the economicbenefits embodied in an asset are expected to be consumed by an entity. Leases 6
  • 7. Key ConceptsUnearned Finance Income (U/E-FI) is the difference b/w: The gross investment in the lease; and The net investment in the lease.The Implicit Interest Rate (IIR) in a lease is a discount rate that, at theinception of a lease, causes aggregate PV of: The MLPs and The UGRV to be equal to the sum of; The FV of the leased asset plus Any IDCs of the lessor.Incremental Borrowing Rate (IBR) The rate a lessee would have paid ifhe had borrowed funds to purchase an asset on similar lease with a similar securityContingent rent is that portion of lease payments that is not fixed inamount but is based on the future amount of factor that changes other thanwith the passage of time. Leases 7
  • 8. ClassificationThere are two main types of leases: Capital or Financing Lease Operating LeaseCapital leases are further classified into following types: 1. Financing Lease 2. Leveraged Lease 3. Sales and Lease Back 4. Direct Lease Leases 8
  • 9. Definitions FINANCE LEASE Capitalization CriteriaThe criteria about capitalization of leases are given in para 10 of IAS 17 as: The lease transfers ownership of an asset to a lessee by the end of lease term; The lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than the FV at the date the option becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised; The lease term is for the major part (≥75%)¹ of the economic life of the asset even if title is not transferred; At the inception of the lease PV of the MLPs amounts to the FV (≥90%)² of the leased asset; and The leased assets are of such a specialized nature that only the lessee can use without major modification. Leases 9
  • 10. Definitions FINANCE LEASES Additional Capitalization CriteriaPara 11 of IAS 17 gives some more criteria that distinguish capital leases from operatingleases: If the lessee can cancel the lease, the lessor’s losses associated with the cancellation are borne by the lessee; Gains or losses from the fluctuation in FV of RV accrue to the lessee; and the lessee has the ability to continue the lease for a secondary period at a rent that is substantially lower than market rent.Para 12 IAS 17 still goes on to say that the criteria mentioned in para 10-11 are not final.For instance, it says, if it is clear from other features that the lease does not transfersubstantially all risks and rewards incidental to ownership, the lease is classified as anoperating lease.__________¹,² FASB Statement 13 has quantified the values. Leases 10
  • 11. Definitions OPERATING LEASEAn operating lease stands in contrast to a financial lease in almost all aspects. This leaseagreement gives to a lessee only a limited right to use an asset. The lessor is responsiblefor upkeep and maintenance of an asset. The lessee is not given BPO at the end of thelease period. This is similar to renting of assets. SALE & LEASE BACK Under this arrangement, an owner of an asset sells the asset to a party (the buyer), whoin turn leases back same asset to the owner in consideration for lease rentals. However,under this arrangement, assets are not physically exchanged but it all happens in recordsbooks only. Sale and lease back transaction is suitable for those assets, which are notsubject to depreciation but appreciation, for instance, a piece of land in a exotic location.The advantage of this method is that the lessee can satisfy himself completely regardingthe quality of an asset and after possession of an asset convert the sale into a leasearrangement. The lessor has two sources of earnings under a sales type lease: A profit, at the lease inception date, Interest revenue over the lease term. Leases 11
  • 12. Definitions LEVERAGED LEASINGUnder leveraged leasing arrangement, a third party is involved beside lessor and lessee. Alessor borrows a part of purchase cost (say 70%) of an asset from a third party i.e., lenderand the asset so purchased is held as a security against such loan. The lender is paid-offfrom lease rentals directly by a lessee and surplus after meeting claims of lender goes tothe lessor. The lessor, the owner of an asset is allowed to record depreciation expenserelated with that asset. DIRECT LEASINGUnder direct leasing, a company acquires a right to use an asset from a manufacturer directly. The ownership of an asset leased-out remains with the manufacturer. Most direct-financing leases involve banks, which make profits by lending money at an interest ratespecified in their contract with the lessee. These banks do not sell assets of the type beingleased but merely provide finance for assets acquired for a lease. Acquisition of vehiclesfrom the direct outlets of car manufacturers like Honda, Mercedes, Toyota, BMW, Ford,Jaguar, etc. is an example of direct leasing. Leases 12
  • 13. MLPs Calculation – FASB St. 13 Yes No Check-out if the lease contract includes BPO Clause???Then MLPs shall include the Then MLPs shall include the following:following: Periodic lease payments over the Periodic lease payments lease term up-to the date on which The amount of GRV (if any) BPO becomes exercisable Any payment required by the lessee Amount of BPO for failure to renew or extend the lease at the end of lease term Leases 13
  • 14. RV Calculation – FASB St. 13 & IAS 17 Equals to EL Less than EL Check-out if the lease term equals to Economic Life (EL) of the asset???It has RV of a leased asset It has two parts: only. First, cost pertaining toNote: The lease contract may remaining useful life ofprovide to guarantee all, part an asset or none of asset’s RV. Second, RV of an asset Leases 14
  • 15. Discount Rate to be Applied by a Lessee - FASB St. 13 & IAS 17 Yes No Check-out if the lease contract provides interest rate implicit in it? IBR shall not be used when: Implicit rate is known, Use IBR for discounting lease Implicit rate is less than IBR liability over the lease term, if That means under these two implicit rate is notconditions implicit rate shall be determinable. Refer to slide 17used. Refer to slide 17 for MLP for MLP calculations. calculations. Leases 15
  • 16. Depreciation Expense Calculation – FASB St. 13 & IAS 17 Yes No Check-out if the lease contract transfers ownership at the end of lease term or contains BPO Clause in it??? Depreciate lease asset Depreciate lease asset overover the economic life. the lease term. Leases 16
  • 17. Lessee’s Books Lessor’s BooksLease Payable Lease ReceivableLease Receivable/Payable Amount = FV - PV of GRV - PV of UGRV (If any)[Lease Payable amount represents the PV of MLPs from lessee’s perspective] Leases 17
  • 18. Leases 18
  • 19. Implicit Rate versus IBRFASB Statement 13 requires the lessee to use his IBR in calculating the PV of MLPs unless(1) the lessee can determine the implicit rate in the lease and (2) the implicit rate is lessthan the lessee’s IBR.IAS 17 para 20, says, the discount rate to be used in calculating the PV of the MLPs is theinterest rate implicit in the lease, if this is practicable to determine, if not, then lessee’s IBRshall be used. Any IDCs of the lessee shall be added to the amount to be recognized as anasset.In practice, the number of instances in which the IBR should apply is small, for the followingreasons:1. Most lessors disclose the interest rate implicit in their lease agreements.2. The lessee knows the FV of the asset being leased to him.3. Leased asset may be subject to high rate of obsolescence, which makes expected RVs nominal. Thus, the impact on FV of the asset is negligible.Important note: The calculations for lease receivable amount by a lessor at his requiredrate of return on his investment in an asset are done for every lease deal separately. For alessee, it becomes implicit interest rate. He has to calculate it or it shall be known to him bya lessor. Lease 19
  • 20. An annuity is a series of equal cash f lows occurring at equal intervals over a period of time. Ordinary Annuity: If the first cash flow occurs at the end of the first period, the annuity is called Ordinary Annuity or an Annuity in Arrears. Annuity Due: If the first cash flow occurs at the beginning of first period. The annuity is called an Annuity Due or an Annuity in Advance.PV of MLPs under Ordinary Annuity =PV of MLPs under Annuity Due = (1+r) Leases 20
  • 21. Accounting Date Description Ref. Debit Credit Finance Lease: Lessor’s Books AED. AED.1/1/20xx Lease Receivable xxx Asset xxx (Lease Receivable recorded at Net Investment in Leased Asset by the lessor) Cash xxx Lease Receivable xxx (On receipt of 1st lease installment)31/12/20xx Lease Receivable xxx Interest Income xxx (On booking interest income earned) Leases 21
  • 22. Accounting Date Description Ref. Debit Credit Finance Lease: Lessee’s Books AED. AED.1/1/20xx Lease Asset xxx Lease Payable xxx [Lease asset and lease liability shall be recorded at lower of : (1) PV of MLPs or (2) FV of asset, at the inception of the lease] Lease Payable xxx Cash xxx31/12/20xx Interest Expense xxx Lease Payable xxx Lease Payable xxx Cash xxx Depreciation expense xxx Accumulated Depreciation xxx Depreciation of an asset is charged over:  The EL of an asset, if ownership transfers to lessee at the end of lease term or there is a BPO  The term of lease, if title does not transfer or there is no BPO Leases 22
  • 23. Accounting Finance or Capital LeasesFinancial Statements’ Presentation & Disclosure Statement of Comprehensive Income For the financial year ended December 20xxLessor’s Perspective Lessee’s Perspective AED. AED.Interest Revenue xxx Interest Expense xxx Depreciation Expense xxx Important note: For the information to be included in explanatory notes to the financial statements of lessee and lessor, refer to para 31 and para 47of IAS 17 respectively. Leases 23
  • 24. Accounting Finance or Capital Leases Financial Statements’ Presentation & Disclosure Statement of Financial Position As at December 31, 20xxLessor’s Perspective Lessee’s PerspectiveASSETS AED. ASSETS AED.Lease Receivable xxx Leased Asset xxx Less: Accumulated Dep. (xxx) Net Leased Asset xxx LIABILITIES Lease Liability xxx Leases 24
  • 25. Accounting Date Description Ref. Debit Credit Operating Lease: Lessor’s Books AED. AED.1/1/20xx. Cash xxx Lease Rental Revenue xxx (Being the revenue earned through leased assets rental)31/12/20xx Depreciation Expense xxx Accumulated Depreciation xxx (Being the depreciation of leased asset recorded) Operating Lease: Lessee’s Books Lease Rent Expense xxx Cash xxx (Being the lease rent expense paid) Important note: For the information to be included in explanatory notes to the financial statements of lessor and lessee, refer to para 56 and para 35 respectively. Leases 25
  • 26. Accounting Operating Leases Financial Statements’ Presentation & Disclosure Statement of Comprehensive Income For the financial year ended December 20xxLessor’s Perspective Lessee’s Perspective AED. AED.Lease Rental Revenue xxx Lease Rental Expense xxxDepreciation Expense xxx Important note: For explanatory notes to be included in the financial statements of lessor and lessee, refer to para 56 and para 35 respectively. Leases 26
  • 27. Land & Building LeaseWhen a lease includes both land and buildings, acompany MUST consider land and building partsseparately for their classification as operating orfinance lease. MLPs are allocated between theland and buildings parts in proportion to therelative FVs of the leasehold interests in the landand buildings parts. Leases 27
  • 28. On January 01, 2008, AAA company leased-out a generator to BBB company . The terms and conditions of the lease are as given below: # Description of Terms & Conditions of the lease: 1 Cost to AAA and FV of the generator is AED. 20,000 2 Term of lease, 4 years (covers 67% of EL of the generator) 3 Economic life of the asset, 6 years 4 The lessee has guaranteed 100% RV, at the end of lease term, VIZ estimated at AED. 3,000 5 Implicit rate of interest used in the lease payments and lessee’s IBR is 12% 6 Annual lease payments to be made at the beginning of each year is (annuity due) are determined by the lessor as given on next slide. 7 The lease uses straight-line depreciation on the leased asset. Leases 28
  • 29. Description Amount AED.Cost & FV of the generator 20,000PV of GRV (1,906)PV of MLPs (≥90% i.e. 90.47%) 18,094Annual Lease Payment (Recoverable amount / PV factor)Annual Lease Payment (AED. 18,094 / 3.4018) 5,319 PV of GRV = PV of GRV = 3,000/(1.12)^4 = 3,000 x 0.6355 = 1,906The aggregate PV of MLPs to be recovered is ≥90%, therefore, it is a capital lease. Leases 29
  • 30. Annual Net Lease Receivable/P Interest Net Reduction in Payments ayable Revenue/Ex Receivable/Paya Year Receivable/Paya (Annuity outstanding pense for the ble on 31 ble Balance Due during the year December Method) year 1 2 3 4 5 6 6-2 3x12% 2-4 3+4 AED. AED. AED. AED. AED.01/01/08 - - - - 20,00001/01/08 5,319 14,681 1,762 3,557 16,44301/01/09 5,319 11,124 1,335 3,984 12,45901/01/10 5,319 7,140 857 4,462 7,99701/01/11 5,319 2,678 322 4,997 3,000 (RV)Total 21,276 4,276 17,000 Leases 30
  • 31. Lessor’s Books [AAA Co. Books] Lessee’s Books [BBB Co. Books] Description Dr. Cr. Description Dr. Cr.1 Lease Receivable 20,000 1 Lease Asset- Generator 20,000 Lease Asset - Generator 20,000 Lease Liability 20,000 (To record capital lease on 01/01/08) (To record capital lease on 1/1/08)2 Cash 5,319 2 Lease Liability 5,319 Lease Receivable 5,319 Cash 5,319 (To record the 1st lease payment on 01/01/2008) (To record lease payment on 1/1/08)3 Lease Receivable 1,762 3 Interest Expense 1,762 Interest Revenue 1,762 Lease Liability 1,762 (To record interest earned on 31/12/08.) (To record interest expense on 31/12/2008) 4 Depreciation Expense 4,250 Accumulated Depreciation 4,250 To record Depreciation [(20,000-3000)/4 = 4,250 p.a.] Leases 31
  • 32. Lessor’s Books [AAA Co. Books] Lessee’s Books [BBB Co. Books] Description Dr. Cr. Description Dr. Cr.1 Cash 5,319 1 Lease Liability 5,319 Lease Receivable 5,319 Cash 5,319 (To record the last lease payment) (To record lease payment on 01/01/2011)2 Lease Receivable 322 2 Interest Expense 322 Interest Revenue 322 Lease Liability 322 (To record interest earned on 31/12/11) (To record interest expense on 31/12/2011)3 Lease Asset – Generator 3,000 3 Depreciation Expense 4,250 Lease Receivable 3,000 Accumulated Depreciation 4,250 (Final Settlement entry 31/12/11) To record Depreciation [(20,000-3000)/4 = 4,250 p.a.] 4 Accumulated Depreciation 17,000 Lease Liability 3,000 Lease Asset 20,000 (Final settlement entry on 31/12/11) Leases 32
  • 33. Advantages1. There is no requirement to pay entire amount upfront for an asset acquired through a lease arrangement. Further, it provides flexible payment plan suiting best to the businesses according to their income streams and cash flow patterns.2. The arrangement under leases provide great deal of flexibility in terms of adopting to rapid changes in technology and capacity needs from lessee’s point of view. It helps companies to stay competitive in business.3. Leasing arrangement has resolved critical cash problem for a lessee by providing 100% financing for a leased asset.4. Leases preserves credit-lines for other business pursuits like purchase of inventory of raw materials, project finance or other emergency uses.5. Leasing may help a manufacturer accelerate sales of his products. Leases 33
  • 34. Advantages6. A lessee may avoid many of restrictive covenants that are usually part of long term contracts for credit-lines. Requirements with respect to, minimum net working capital, subsequent borrowings, changes in management, mortgages or pledges on assets, nominees in Board of Directors, and so on are not normally found in lease contracts.7. Leasing arrangements help a lessor to prevent dilution of ownership which otherwise is inherent when equity shares or convertible bonds are issued for raising the necessary finance for acquisition of assets.8. The use of sale and lease back arrangements may permit a company to increase liquidity by converting an existing asset into cash that can be used as a working capital.9. Leasing balances usage and cost of an asset. Leasing makes sense when an asset used creates a return that exceeds its cost. It is said for this point that leases means good business sense. Leases 34
  • 35. Advantages10. Leasing provides fixed rate financing. Leasing is not subject to market fluctuations and interest rate increases. One can negotiate periodic lease payments and secure a fixed rate for the term of lease. This makes it much easier to manage project cash flows and budgets for planning purposes.11. Leasing provides hedge against inflation. Since lease payments apply to use of an asset and are not paid for ownership of an asset that depreciates consistently. Furthermore, cash savings can yield a return that fights inflationary pressures.12. Leasing conserves working capital. Leasing enables a lessor to save working capital for his company, since it covers all costs associated with capital asset purchases like maintenance, insurance, up-keep etc., etc.13. Leasing may help a lessee to avoid the risk and cost of idle asset after required utility of an asset is over. Leases 35
  • 36. Advantages14. Lease mode of financing is also compared to security-tied credit. It saves capital for other needs of a company.15. In case of operating leases arrangement, the lessee’s Debt to Equity Ratio and Return on Capital Employed (ROCE) is not increased. This is due to off- balance sheet financing of the asset.16. Operating lease provides tax benefits to a lessor. Some leasing companies transfer tax benefits received from ownership of assets to lessees through competitive rates and lower execution fees.17. With a bank loan or direct purchase, a company normally claim depreciation according to IAS 16 recommendation of useful life of an asset. Depreciation for an asset can be spread over 5 to 7 years. However, the same asset under a lease can be expensed-out 100% over the lease term selected by a company. This could, for instance, write-off an asset over 3 years instead of 5 or 7 years. This will, eventually, provide bigger tax benefits to the lessee. Leases 36
  • 37. Disadvantages1. A company is unable to sell or sub-lease an asset in the event it is no longer required and cannot upgrade it to a newer or better asset without either paying-off the remaining contract dues, or paying fines to cancel the contract.2. A lessee loses certain tax benefits which are available to a lessor (owner) who uses the assets himself.3. A lessee has often to bear technological obsolescence since some lease contracts have non-cancelable clause in them.4. Early termination of a contract by a lessee may impose severe penalties from a lessor.5. Although leasing avoids paying an upfront amount, over a long period of time, it often works out considerably more expensive than outright purchase. A company pays cost of asset as well as the leasing companies charges and other dues incidental to the lease contract.6. Lessees are responsible for the maintenance and repair of leased asset. Some leasing companies allow lessee to cover the maintenance and repair costs for an extra sum in their lease installment. Leases 37
  • 38. Glossary1. Lessor may be owner of an asset being leased.2. Lessee is a party to whom right to use an asset is being transferred.3. Bargain Purchase Option (BPO) refers to a provision giving the lessee the right to acquire leased asset at a price so favorable that exercise of the option appears reasonably assured at the inception of the lease.4. Bargain Renewal Option (BRO) refers to a provision that gives the lessee a right to renew a lease at a rental so favorable that exercise of the option appears reasonably assured at the inception of the lease.5. Contingent rentals means increase or decrease in lease payments after the inception of a lease that result from changes in factors on which lease payments are based.6. Economic Life (E/L) of a leased asset means the remaining usable life of an asset for the purpose to serve.7. Fair Value (FV) of a leased asset refers to normal selling price.8. Inception of Lease Contract refers to date of lease contract.9. Sublease (S/L) refers to further transfer of the right to use an asset from a lessee to a third party. It is subject to the contract between first and second party.10. Lease Term refers to the fixed non-cancellable term of a lease. Leases 38
  • 39. Glossary11. Minimum Lease Payments (MLP): Consists of all amounts that a lessee is obligated to pay under the terms of a lease agreement. It excludes contingent rents, costs for services and taxes paid by a lessor. These shall be additional payments.12. Estimated Residual Value (ERV) refers to FV of an asset at the end of the lease term. It has two parts namely Guaranteed Part and Unguaranteed Part. FV is calculated for two parts separately and then added to show ERV.13. Guaranteed Residual Value (GRV) A lessee’s assurance to a lessor that lessor will recover at least guaranteed amount at the end of the lease term. A lessor usually writes this clause in his contract in order to cover risk of deterioration of an asset value beyond what is mentioned in a contract.14. Unguaranteed Residual Value (UGRV) The portion of a leased asset’s RV at the end of a lease term that is not guaranteed by a lessee.15. Initial Direct Costs (IDCs) are costs of legal consultancy, processing of documents, negotiating the contracts etc., etc.16. Incremental Borrowing Rate (IBR) refers to a rate that a lessee otherwise had paid to the borrowed amount to acquire an asset under similar lease arrangement.17. Implicit Interest Rate (IRR) refers to the discount rate (applied to MLPs & GRV) that causes the aggregate PV to be equal to FV of leased asset to a lessee. Leases 39
  • 40. Abbreviations used # Abbreviation Description 1 BPO Bargain Purchase Option 2 BRO Bargain Renewal Option 3 b/w Between 4 GRV Guaranteed Residual Value 5 EL Economic Life 6 ERV Estimated Residual Value 7 FV Fair Value 8 IBR Incremental Borrowing Rate 9 IIR Implicit Interest Rate 10 IDCs Initial Direct Costs 11 F/Y Final Year 12 MLPs Minimum Lease Payments 13 PV Present Value 14 RV Residual Value 15 S/L Sublease 16 UGRV Unguaranteed Residual Value 17 U/E-FI Unearned Finance Income Leases 40
  • 41. Appendix A Leasing Soft-wares# Name Web address 1 SiriusPro Rental Software http://www.orion-soft.com 2 Dominion Leasing Software http://www.dominionls.com 3 LeaseWave http://www.odessatechnologies.com 4 ProLease http://www.proleasesoftware.com 5 AMTdirect http://www.amtdirect.com 6 Propertyware http://www.propertyware.com 7 LeaseEagle http://www.leaseeagle.com 8 Visual Lease http://www.visuallease.com 9 Skire Unifier http://www.skire.com 10 Ryznware Software http://www.ryzn.com Leases 41
  • 42. # Source Entitled/Author1 IAS 17 Leases2 SIC-15 Operating leases incentives3 SIC-27 Evaluating the substance of transactions involving the legal form of a lease4 SIC-29 Service concession arrangements: Disclosures5 SIC-32 Intangible assets – Website costs6 IFRIC 4 Determining whether an arrangement contains a lease7 IFRIC12 Service concession arrangements8 FASB St. 13 Leases9 Intermediate Lanny G. Chasteen, Richard E. Flaherty, Melving C. O’Connor Accounting 5/e Leases 42
  • 43. FCMA, FPA, MA (Economics), BSc. Contact: At.bhatty@gmail.comLeases 43