Course Description

Synopsis:

In this recording, the speaker will address crucial questions that a lessee will ask on the accounting of contracts that are or potentially leases under FRS 116 Leases.

Episode 1: Is my Contract a Lease or Contains a Lease?

Examples are used to highlight grey areas involving identified assets, supplier’s substitution right, lease and non-lease components in the contract, for instance, that the Finance Team should take note of.

• Does my contract contain a lease?
• Why is it important to determine my contract contains a lease?
• Why is it important and how to determine the lease term?
  • If my lease contract does not include option to extend / terminate
  • If my lease contract includes an option to extend / terminate
• What happens if there is no written lease contract?

Episode 2: Determining Lease Term

10 interesting examples are used to explain how to determine lease term accurately in leases with various conditions and circumstances that any Finance Team might encounter.

Examples of scenarios:

• Leases with rent-free periods
• Leases with options to renew, extend or terminate
• Leases with no stated duration

Episode 3: Determining Lease Liability and Right-of-Use Asset

The speaker will address important areas in determining lease liability and right-of-use (ROU) asset in leases. Practical cases and examples are used to illustrate the complications which might arise from various terms in lease payments, such as:

• Lease payments at different time of the month
• Lease payments that are linked to an index, fixed or floating interest rate
• Lease payments that are dependent on sales or usage

The speaker will return in FRS 116: Accounting of Leases – What are the Areas to Consider? (Part TWO).

Intended For:

• Audit Professionals / PAIP 
• Finance Professionals  / PAIB 
• Public Sector Finance
• C-suite & Directors

Competency Mapping: 

• CPE Category 1 = 1.5 CPE Hour