Financial Accounting Seminar

Accounting for Leases & Tax Implications (PSAK 73)

Prepared by:

GROUP 7

Muhammad Mukhsin – 1710533001

Febrya Eka Dewanty – 1710533043

INTERNATIONAL ACCOUNTING
FACULTY OF ECONOMICS
ANDALAS UNIVERSITY
2020/2021
 INTRODUCTION

A. BACKGROUND
In 2017, the Financial Accounting Standards Board of the Indonesian Institute of
Accountants (DSAK IAI) approved three Financial Accounting Standard Statements
(PSAK) which subsequently became effective as of January 1, 2020.

One such standard is PSAK 73: Leases which was passed on April 26, 2017. This
standard was adopted from IFRS 16: “Leases” published by the International Accounting
Standards Board (IASB) so that it reflects IASB's considerations and deliberations on
various accounting issues related to leases. However, there is several IFRS 16 standards
that were not adopted by PSAK 73: Leases, namely:
• IFRS 16 Appendix C paragraph C1 regarding the effective date.
• IFRS 16 Appendix C paragraph C21 (e) regarding the Revocation of another
Statement, namely by adding the revocation of ISAK 25: Land Rights.
• IFRS 16 Appendix D regarding consequential amendments to IFRS 1 First-time
Adoption of International Financial Reporting Standards because IFRS 1 has not
been adopted in Indonesia.
• PSAK 73 adds the Basic Conclusion on the reasons for the revocation of ISAK
25: Rights to Land.

PSAK 73: Leases will revok:

a. PSAK 30: Leases; The accounting model for leases previously regulated in PSAK
73 requires lessees and lessors to classify their leases as financial leases or
operating leases and account for the two types of leases differently. This model is
criticized as having shortcomings because it is unable to meet the needs of users
of financial statements because it does not always provide an accurate
representation of lease transactions. In particular, the model does not require the
lessee to recognize assets and liabilities arising from operating leases.
b. ISAK 8: Determining Whether an Agreement Contains a Lease: An entity applies
this interpretation on January 1, 2012, this Interpretation provides guidance to
 determine whether an agreement constitutes a lease or contains a lease that must
be treated in accordance with PSAK 30: Leases. However, this interpretation no
longer provides a guide to determine how the lease should be interpreted because
it is still related to PSAK 30.
c. ISAK 23: Operating Leases - Incentives;
d. ISAK 24: Evaluation of the Substance of Several Transactions Involving and
Legal Forms of Lease;
e. ISAK 25: Land Rights; ISAK 25 was withdrawn because IFRS 16 had provide
clarification on whether certain contracts that do not transfer legal rights to land
are lease transactions or land purchase transactions. This is relevant in the context
of accounting treatment for land rights in Indonesia that has been in ISAK 25.

PSAK 73: Leases establish the principles of recognition, measurement,

presentation, and disclosure of leases by introducing a single accounting model especially
for lessees. Its purpose is to ensure that tenants and the charterer provides relevant
information that accurately represents the transaction. This information provides a basis
for users of financial statements to assess the impact of the lease transaction on the
entity's financial position, financial performance and cash flows. Lessees are required to
recognize right-of-use assets and lease liabilities. There are 2 optional exceptions to the
recognition of lease assets and liabilities, namely: (i) short-term leases and (ii) leases
where the underlying assets are low-value.

PSAK 73: Leases proposed to be effective as of January 1, 2020 with this early
adoption option are permitted for entities that have also implemented PSAK 72: Revenue
from Contracts with Customers which will also apply effective on January 1, 2020.

Reasons for Issuance of PSAK 73: Leasing is because leasing is an important

activity for many entities. Leasing is a way to gain access to assets, obtain financing, and
reduce the entity's exposure to the risk of asset ownership. The prevalence of this lease
means that it is important for users of financial statements to have a complete and
understandable picture of leasing activities by the entity.
 The rules regarding lessees in PSAK 73: Leases introduce a single accounting
model and require the lessee to recognize assets and liabilities for all leases with a lease
term of more than 12 months, except for the underlying assets low-value. The lessee is
required to recognize a lease asset that represents his right to use the underlying asset
leasing and a lease liability that represents his obligation to pay the lease. The lessee
measures the right to use assets in a manner similar to other non-financial assets (such as
fixed assets) and lease liabilities in a manner similar to other financial liabilities. As a
consequence, tenants admit depreciation of the use assets and interest on the lease
liability, as well as classifying cash payments for lease liabilities are the principal and
interest and presented in the cash flow statement by applying PSAK 2: Statement of Cash
Flows. Assets and liabilities that arise from leases are initially measured at their present
values. The measurement includes the irrevocable lease payments (inflation-related
payments), and also includes payments to be made on an optional period if the lessee is
certain to exercise the lease extension option or does not exercise the termination option.
In PSAK 73: Leases include disclosure requirements for tenants. The lessee needs to
apply his judgment in determining the information to disclose in order to achieve the
objective of providing a basis for users of financial statements to assess the impact of the
lease on the tenant's financial position, financial performance and cash flow.

As for lessors, PSAK 73: Leases substantially continue the accounting

requirements of the lessee in PSAK 30: Leases. Therefore, lessees continue to classify the
lease as an operating lease or finance lease, and account for the two types of leases
differently. PSAK 73: Lease too requires additional disclosures to tenants that will
enhance the information disclosed regarding the exposure as lessee risk, especially
regarding residual value risk.
B. PROBLEM FORMULATION
1. What is the purpose of PSAK 73
2. What is the scope of PSAK 73?
3. How to identify leases based on PSAK 73?
4. How is the separation of contract components based on PSAK 73?
5. How is the lease term determined according to PSAK 73?
6. What are the accounting arrangements for the lessee?
7. What are the accounting arrangements for the lessor?
8. How are the sale and leaseback transactions?

C. PURPOSE
1. Knowing and understanding the objectives of PSAK 73;
2. Knowing and understanding the scope of PSAK 73;
3. Knowing and understanding identifying leases based on PSAK 73;
4. Knowing and understanding the separation of contract components based on
PSAK 73;
5. Knowing and understanding the determination of the lease period according to
PSAK 73;
6. Know and understand the accounting arrangements for the lessee;
7. Know and understand the accounting arrangements for the lessor;
8. Knowing and understanding sale and leaseback transactions.
 DISCUSSION

A. DEFINITION AND CONCEPT OF LEASE

A lease is an agreement which the lessor gives rights to the lessee to use an asset
over the agreed period of time. Leasing is an option for companies as an alternative to
financing in order to save cash on the entity. Leases are classified into:
• Operating lease
• Financial lease
An operating lease is presented off balance sheet where it does not exist recording
assets, debts and depreciation expenses that are displayed in the statement of financial
position so as to increase several financial ratios such as efficiency and leverage.
Operating leases have several characteristics such as having a short term, the goods can
be used by the lessee, but the assets are still owned by the lessee, there is no transfer of
ownership at the end of the lease period, as well maintenance of the tool usually by the
lessor.
There are several advantages and disadvantages of performing an operating lease
namely as follows:
Advanyages Disadvantages
• Get funding at a fixed rate. • An entity does not have assets for
• Appropriate for assets that require the operations presented in the
fast changing technology because financial statements.
the investment is cheaper (flexible). • An entity's sustainability may be
• Tax advantages (the burden impaired if future leases are not
becomes larger). obtained.
• Not presented in the statement of • For special tools difficult to obtain.
financial position as assets and debt • Lease prices can be more expensive
off balance sheet. than buying assets. It cannot be
• Better balance ratio used optimally if technology
• The entity does not cover changes rapidly.
maintenance costs. • Limited use depending lease
 • Save cash and funding in the present agreement.
because the costs incurred are the • Cannot be used as a bank
same as lease costs. guarantee.

A financial lease is a form of long-term funding, in other words, a financial lease

is a purchase in installments because at the end of the lease, the assets will belong to the
entity. A finance lease is a transfer of the risks and rewards of the asset to the lessee.
General criteria in accordance with PSAK 30: leases and ISAK 8 Transactions that
contain leases, which in PSAK 73 are still used from the side of the lessor. Where the
lessor no longer recognizes assets, but debt and interest earning. Meanwhile, the
recording of assets and amortization is carried out by the lessee, as well as debt and
interest expense on long-term payment contracts.

B. LEASE RECOGNITION
1. Lessee
Assets and liabilities are recognized at the fair value of the leased asset or at the
present value of the minimum lease payments, if the present value is lower than fair
value. The discount rate used is the interest rate implicit in the lease, where
practicable can be determined; otherwise, the lessee's incremental borrowing rate is
used. The lessee's initial direct costs are added to the amount recognized as an asset,
including costs related to certain lease activities, such as negotiating and securing the
lease.

2. Lessor
The lessor recognizes assets in the form of finance lease receivables on the
balance sheet at an amount equal to the net investment in the asset's lease (par 32).
Net lease investment is the gross lease investment, discounted at the interest rate
implicit in the lease. Gross lease investment is the aggregate sum of:
a. The minimum lease payments that the lessor will receive; and
b. The unsecured residual value to which the lessor is entitled.
 Net lease investment = PV (MLP + unguaranteed residual value)
The investment value in the net lease is usually equal to the fair value of the asset
at the inception of the lease. The difference between the gross investment value of the
lease and the investment value of the net lease is unearned finance income.
For finance leases other than those involving manufacturer or dealer lessors,
Initial direct costs are calculated as part of the initial measurement of lease
receivables financing and reducing income recognized over the lease term (par 34).
The interest rate implicit in the lease is determined such that no separate disclosure is
required (par 34).

C. MEASUREMENT OF LEASES
1. Lessee
The minimum lease payments must be separated between the parts which
constitute finance charges and part that represents payment of obligations. Finance
charges should be allocated to each period during the lease term.

2. Lessor
Payment receipts from lease receivables are treated as payments principal and
financing income (par 33). The recognition of finance income is based on a pattern
reflecting a constant periodic rate of return on the lessor's net investment in the
finance lease (par 35).

D. PSAK 73: LEASE

PSAK 73: Leases are proposed to be effective in the annual reporting period on or
after January 1, 2020 and early application is specifically permitted for entities that have
applied DE PSAK 72: Income from Contracts with Customer.

1. The Objective of PSAK 73

This Statement establishes the principles for recognizing, measuring, presenting,
and disclosing leases. Its purpose is to ensure that both tenants and renters provide
relevant information in a way that accurately represents the transaction. This
 information provides a basis for users of financial statements to assess the impact of
the leases on the entity's financial position, financial performance and cash flows. An
entity shall consider the terms and conditions of the contract and all relevant facts and
circumstances when applying this Standard. An entity shall apply this Standard
consistently for contracts with similar characteristics and in similar circumstances.

2. The Scope of PSAK 73

Entities shall apply this standard to all leases, including leases of leased assets
under subsidies, except for:
a. Leases for exploration or mining of minerals, oil, natural gas and similar non-
renewable resources;
b. Leases of biological assets within the scope of PSAK 69: Agriculture owned by
lessees;
c. Service concession agreement within the scope of ISAK 16: Service Concession
Agreement;
d. Intellectual property license granted by lessees within the scope of DE PSAK 72:
Revenue from Contracts with Customers; and
e. Rights owned by the lessee in the license agreement within the scope of PSAK
19: Intangible Assets for items such as films, video recordings, stage works,
manuscripts (written works), patents, and copyrights.

The exception to recognition by lessees is that the lessee can choose not to apply
the requirements in paragraphs 22-49 for:
• Short-term leases (less than or equal to 12 months and does not contain a
call option)
The selection of short-term leases is made based on the underlying
asset class related to user rights. Fundamental set classes are groupings of
underlying assets with a similar nature and use in the operations of the
entity. Selection for leases where the underlying asset is low value can be
made on a lease-per-lease basis.
 • Leases whose underlying assets are low value by:

o Has no dependence or low intercalation with other assets.

o Low value in absolute terms (IFRS 5,000), regardless of materiality.
o When the new asset has material value, then the valuation of the new
asset.
o If the asset is sub leased then it does not meet the low value asset.
o Examples: laptops, cellphones, furniture.

If the exemption option applies, the lease expense is recognized as an expense

either by means of the straightline method or by other methods as long as it represents
the pattern of the lessee's benefits. An entity will normally consider a new lease if: (a)
there is a modified lease; or (b) there is a change in the lease term.

3. Lease Identification based on PSAK 73

A contract is or contains a lease if it conveys the right to control the use of the
identified asset for a period of time to be exchanged for consideration (PP09-PP31).
Time period can be described as the amount of use of assets such as production units.
An entity revalues the contract if the terms and conditions of the contract change.
 Identifying assets are defined explicitly or implicitly. Then the supplier. Suppliers
(suppliers do not have substantive substitution rights). The physical asset capacity can
be distinguished. The lessee will substantially benefit economically from the user of
the asset, the tenant directs the use of the asset, and the contract contains the lease.

4. Separating Contract Components based on PSAK 73

a. Lessee
For contracts that contain a lease component and an additional lease or
non-lease component, the lessee allocates the benefits in the contract to the lease
component based on the relative separate price of the lease component and the
aggregate separate price of the non-lease component.
The separate price is determined based on the price the lessee, or similar
supplier, would charge the entity separately. If separate observable prices are not
available, the lessee makes estimates by maximizing the use of observable
information.
As a practical matter, the tenant can choose, based on the base asset class,
not to separate the non-lease component from the lease component, and choose to
record as a single lease component.
The lessee does not apply the practical method for embedded derivatives
that meet the criteria of PSAK 71. Unless the practical method in paragraph 15 is
applied, the lessee accounts for the non-lessee component by applying other
relevant Statements.

b. Lessee
In a contract that contains a lease component and one or more lease or
non-lease components, the lessee allocates the consideration in the contract by
applying PSAK 72: paragraphs 73 – 90.

5. Lease Period based on PSAK 73

An entity shall determine the lease period as the irrevocable lease period, and
also:
 a. The period covered by the option to extend the lease if the lessee is sufficient
sure to exercise the option; and
b. The period covered by the option to terminate the lease if the lessee is
sufficient sure not to exercise that option.
Leases can no longer be enforced when each tenant and lessee has the right to
terminate the lease without the consent of the other party with a penalty not
significant. If only the lessee has the right to terminate the lease, that right is
considered as an option to terminate the lease which is available for consideration
when determining the lease term. If only the lessee has the right to terminate the
lease, the lease period includes the period covered by the option to terminate the
lease.
The lease period starts on the commencement date and includes the free lease
period provided by the lessor to the lessee.
a. Change in the lease period
An entity shall revise the lease term when there are irrevocable changes in
the lease period. For example, the lease period will change if:
• Lessee executes options that were not previously included in
determination of the lease period;
• The lessee does not exercise the options previously included in
determination of the lease period;
• An event occurs that contractually obliges the lessee to exercise an option
that was not previously included in the determination of the lease term; or
• An event occurs that contractually restricts the lessee from exercising
options previously included in determining the lease term.
b. Revaluation of the lease period
The lessee reassesses whether it is certain to exercise the option extension,
or not to exercise the termination option, at the time the occurrence of a
significant event or significant change in circumstances that:
• Be in control of the tenant; and
• Affects whether the lessee is certain to exercise options that were not
previously included in the determination of the lease term, or not to
 exercise options that were previously included in the determination of the
lease term (as described in paragraph PP41).

6. Accounting for Lessees in PSAK 73

In a contract that contains a lease component and one or more lease or non-lease
components, the lessee allocates and records the consideration in the contract to each
component of the lease based on the separate price of the lease component and the
aggregate separate price of the lease component. The relative separate price of the
lease component that has been determined is determined based on the price that will
be charged by the lessee.

Recognition: At the inception date, the lessee recognizes the use rights asset and the
lease liability.
Measurement: At the inception date, the lessee measures the use rights asset at cost.

• Acquisition Cost of Use Rights Assets: The initial measurement amount of the
lease liability, lease payments minus lease incentives (if any), initial direct costs,
estimated demolition costs
• Tenants measure the lease obligations at the present value of the lease payments
has not been paid on that date. Lease payments are discounted using the interest
rate implicit in the lease, if that interest rate can be determined. If the interest
rate cannot be determined, the lessee uses the lessee's incremental loan rate.
• Measurement Model. After the commencement date, the lessee measures the use
asset by applying the cost model. The tenant measures the tenant asset on cost
less accumulated depreciation and accumulated losses impairment, and adjusted
for the remeasurement of the lease liability. Another measurement model is if
the lessee applies the fair value model in accordance with PSAK 13: for his
investment property assets, the lessee also applies a fair value model for the use
of assets that meets the definition of investment property in PSAK 13:
Investment Property.
 If the use of rights assets is related to a fixed asset class in which the lessee
applies the revaluation model in accordance with PSAK 16: Fixed Assets, the lessee
may choose to apply the revaluation model to all of the use assets associated with that
fixed asset class.

Presentation: The lessee presents in the statement of financial position, or

discloses in the notes to the financial statements;
• Asset use rights separately from other assets. If the lessee does not present the
use rights assets separately in the statement of financial position, the lessee:
i. Present the use of the asset in the same heading as the account used to
present the similar underlying asset if the asset is owned; and
ii. Discloses which items in the statement of financial position include the use
of these assets.
• Lease obligations separately from other liabilities. If the lessee does not present
the lease liability separately in the statement of financial position, then the
lessee discloses which items in the statement of financial position include these
liabilities.

Disclosure: the lessee can disclose information in the notes to the financial
statements, as well as the information provided in the statement of financial position,
income statement, and cash flow statement, which provides a basis for users of
financial statements to assess the impact of the lease on financial position, financial
performance, and tenant cash flow. Lessees disclose information about their leases in
notes to financial statements or in a separate section in their financial statements
The lessee shall disclose the following amounts for the reporting period; load
depreciation for leased assets based on the underlying asset class, interest expense on
lease liabilities, expenses related to short-term leases, expenses related to the lease of
recorded low-value assets, expenses relating to variable lease payments that are not
included in the measurement of the lease liability, income from subasing the use of
assets, the total cash disbursements for the lease, additional use rights assets, gains or
 losses arising from sale and leaseback transactions, and the carrying amount of use
assets at the end of the reporting period based on the underlying asset class.

7. Accounting for Lessors in PSAK 73

Lessors classify their respective leases as either an operating lease or a financial
lease. A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of the underlying asset. A lease is classified as
an operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership of the underlying asset. Whether a lease is a finance lease or
an operating lease depends on the substance of the transaction rather than the form of
the contract.
Examples of situations that, individually or in combination, would cause a lease to
be classified as a finance lease include:
• The lease transfers ownership of the underlying asset to the lessee at the end of
the lease term;
• The lessee has the option to purchase the underlying asset at a price that is
expected to be lower than fair value on the date the option is exercised so that it
is sufficiently certain, at the inception date, that the option will be exercised;
• The lease term is a large part of the economic life of the underlying asset even if
ownership rights are not transferred;
• At the date of inception, the present value of lease payments includes at least
substantially all of the fair value of the underlying asset; and
• The underlying asset is specific so that only tenants can use it without significant
modification.
Indicators of situations that individually or in combination may also cause a lease
to be classified as a financial lease are:
• If the lessee can cancel the lease, the lessee's loss related to the cancellation is
borne by the tenant;
• Gains or losses from fluctuations in the residual fair value payable on the tenant
(for example, in the form of a discounted lease rate equal to most of the sales
proceeds at the end of the lease); and
 • Tenants have the ability to continue the lease for the second period at a lease
price that is substantially lower than lease market.

Financial Lease
• Recognition
At the commencement date, the lessee recognizes the assets held under the
lease financing in the statement of financial position and presenting it as a
receivable at an amount equal to the net investment in the lease.
• Initial measurements
o Lessees use the interest rate implicit in the lease to measure the net
investment in the lease.
o If the implicit interest rate in the sub-lease cannot be determined, the
intermediate lessee can use the discount rate used in the main lease
(adjusted for the initial direct costs related to the sub-lease) to measure
the net investment in the sub-lease.
o Initial direct costs, other than those incurred by the manufacturer or
dealer lessees, are included in the initial measurement of the net
investment in the lease and reduce the amount of income recognized over
the lease term.
• Lease net investment
Lease payments included in the measurement of the net investment in the
lease include payments for the right to use the underlying asset during the lease
term that have not been received at the commencement date as follows:
o Fixed payments (including substantially fixed payments), less lease
incentives payable; variable lease payments that depend on the index or
interest rate, which were originally measured using
o Index or interest rate on the inception date; the guarantee of the residual
value given to the lessee by the lessee, a party related to the lessee, or a
third party not related to the lessee who is financially able to carry out
their obligations under the guarantee;
 o The exercise price of the call option if the lessee is confident enough to
exercise the option, and
o Payment of a penalty for terminating the lease, if the lessee will exercise
the option to terminate the lease.
• Next measurement
The lessee recognizes financial income over the lease term, based on a
pattern that reflects a constant periodic rate of return on the net investment of the
lease.
o Lessees allocate financial income over the lease term on a systematic and
rational basis. The lessee applies lease payments related to the period to
reduce the principal and unearned financial income.
o The lessee applies derecognition and impairment in the PSAK 71. The
lessee regularly reviews the estimated unsecured residual value used in
calculating the gross investment in the lease. If there is a reduction in the
estimated unsecured residual value, the lessee shall revise the allocation
of income over the lease term and immediately recognize any reduction
in the amount due.
o Lessees who classify assets under finance leases as held for sale (or
included in the disposal group classified as held for sale) by applying
PSAK 58.
• Lease modification
The lessee enters the modification of the finance lease as a separate lease
if:
a. The modification increases the scope of the lease by adding the right to use
one or more underlying assets; and
b. The lease fee increases by an amount equivalent to the price separately for
increases in scope and appropriate adjustments to these separate prices to
reflect the conditions of the contract certain.
A modification of a finance lease that is not recorded as a separate lease, the
lessee records the modification as a new lease from the effective date of the
modification and measures the carrying amount of the asset. The basis for the net
 investment in the lease immediately preceding the effective date of the lease
modification. If not, the lessee will apply the requirements in PSAK 71:
“Financial Instruments”.
• Disclosure
o The tenant provides a qualitative and quantitative explanation of
significant changes in the carrying amount of the net investment in the
lease financing.
The lessee discloses an analysis of the maturity of the lease payment
receivables, showing the undiscounted lease payments to be received on an
annual basis for a minimum of 5 year and the total for the remainder of the year.
Lessee reconciles lease payments that were not discounted on lease net
investment. Reconciliation identifies unearned financial income related to lease
payment receivables and discounted unsecured residual value.

Operating Lease
• Recognition and Measurement
The lessee recognizes the lease payments from the operating lease as
income on a straight-line or other systematic basis. The lessee applies another
systematic basis if it represents a pattern of benefits from decreasing use of the
underlying asset.
The lessee recognizes the costs, including depreciation, incurred in get
lease income as an expense. The lessee adds the initial direct costs incurred in
obtaining an operating lease to the amount carry the underlying asset and
recognize it as an expense over the lease term on the same basis as lease income.
The depreciation policy for basic depreciable assets for operating leases is
consistent with the lessee's normal depreciation policy for similar assets in
accordance with PSAK 16 and PSAK 19: Intangible Assets. The lessee applies
PSAK 48: Impairment of Assets to determine whether the underlying assets for
an operating lease are impaired. Lessee the manufacturer or dealer does not
recognize the sales profit under an operating lease because it is not the
equivalent of sales.
• Lease modification
The lessee records the modified operating lease as a new lease from the
effective date of the modification, taking into account any prepaid or payable
lease payments related to the original lease as part of the lease payments for the
new lease.
• Presentation
The lessee presents the underlying asset for an operating lease in the
statement of financial position according to the nature of the underlying asset.
• Disclosure
The purpose of disclosure is for the tenants to disclose the information in
the notes to the financial statements, as well as the information contained in the
statement of financial position, income statement and cash flow statement, that is
provides a basis for users of financial statements to assess the impact of the lease
on the tenant's financial position, financial performance and cash flow.
Paragraphs 90–9 7 establish the requirements for how this objective can be
achieved. The lessee shall disclose the amounts as follows for the period
reporting (par 90):
a. For finance leases:
o Sales profit or loss;
o Financial income on the net investment in the lease; and
o Income related to variable lease payments that are not included in the
measurement of the net investment in the lease
b. For operating leases, lease income, separately disclosed income
associated with variable lease payments that are not depending on an
index or interest rate.
Lessors provide the disclosures specified in paragraph 90 in a tabular format,
unless another format is more appropriate. Lessors disclose additional qualitative
and quantitative information about leasing activities to fulfill disclosure
purposes. This additional information includes, but is not limited to, information
that helps users of financial statements to assess:
a) The nature of the leasing activity; and
 b) How the lessee manages the risk associated with the retained interest in
the underlying asset. In particular, the lessee discloses a risk management
strategy for the rights retained in the asset foundation, including the ways
the tenant reduces that risk. Way this may include, for example, a buy-
back agreement, guaranteed residual value, or variable lease payments
for the above uses predefined limits.

o For fixed asset items which are operating leases, the lessee applies
disclosure requirements contained in PSAK 16: Fixed Assets.
o A lessee separates each class of fixed assets into assets that are operating
leases and assets that are not operating leases.
o Lessees provide disclosures in accordance with PSAK 16: Fixed Assets
for assets that are operating leases (based on the base asset class)
separately from assets that the lessee owns and uses.
o Lessees apply the disclosure requirements in PSAK 13: Investment
Property, PSAK 19, PSAK 48: Impairment of Assets Value, and PSAK
69: Agriculture for assets that are operating leases.
o The lessee discloses a lease maturity analysis showing the undiscounted
lease payments to be received on a minimum annual basis for the first 5
years and the total amount for the remainder of the year.

8. Sale and leaseback transactions based on PSAK 73

If the entity (seller – lessee) transfers the asset to another entity (buyer – lessor)
and leases the asset back from the buyer - the lessor, then both the seller – the lessee
and the buyer - lessee records the transfer and lease contracts.
Then, to assess whether the transfer of assets is a sale the entity applies the
requirements for determining when the performance obligations in PSAK 72:
Revenue from Contracts with Customers have been fulfilled to determine whether the
transfer of assets is recorded as a sale of the asset.
• Transfer of Assets is a Sale
 If the transfer of assets by the seller - lessee meets the requirements in DE
PSAK 72: Revenue from Contracts with Customers to be recorded as a sale of
assets, then:
a. The seller - the lessee measures the use rights assets that arise from the
leaseback on the proportion of the previous asset's carrying amount
related to user rights retained by the seller - the lessee. Accordingly,
the seller - the lessee recognizes only the amount of gain or loss
associated with the rights transferred to the buyer - lessor.
b. The buyer - the lessor accounts for the purchase of an asset applying
the relevant Standard, and for lease applying the accounting
requirements of the lessee in this Standard.

If the fair value of the consideration for the sale of the asset does not equal
the fair value of the asset, or if the payment for the lease does not equal the
market price, the entity shall make the following adjustments to measure the
proceeds at fair value:
a. If it is below market price, then recorded as prepaid lease payments.
b. If it is above market price, it is recorded as additional financing
provided by the buyer - the lessee to the seller - the lessee.
• Transfer of Assets Not a Sale
If the transfer of assets by the seller - lessee does not meet the
requirements in PSAK 72: Revenue from Contracts with Customers to be
recorded as sale of assets, then:
a. The seller - lessee continues to recognize the transferred asset and
recognizes a financial liability equal to the proceeds from the transfer.
The seller-lessee records financial liabilities by applying PSAK 71:
Financial Instruments.
b. The buyer - the lessors does not recognize the transferred asset and
recognizes the financial asset at the proceeds from the transfer. Buyer
- lessors record financial assets by applying PSAK 71: Financial
Instruments.
 CONCLUSION

From this paper we can conclude that this Statement establishes the principles of
recognizing, measuring, presenting, and disclosing leases. Its purpose is to ensure that both
tenants and renters provide relevant information in a way that accurately represents the
transaction. This information provides a basis for users of financial statements to assess the
impact of the leases on the entity's financial position, financial performance and cash flows. With
the enactment of PSAK 73: Leases, financial reporting standards are more transparent than
before.