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Intacc Reviewer
Intacc Reviewer
1. Right to obtain substantially all the economic benefits from the use of the identified asset
2. Right to direct the use of the identified asset
o Siya mamimili kung pano gagamitin yung asset
Types of lease
Operating lease
o Does not transfer substantially all the risk and reward of ownership of an underlying
asset
o Lessor is still the owner of the asset
o Rent transaction
Finance lease
o Transfers substantially all the risks and reward of ownership
o Rent transaction in form but sales transaction in substance
Lease payments = Installment payments
o Note: Substance over form
o Criteria to become a finance lease (TOMS) (LESSOR’S PERSPECTIVE)
T – Transfer of ownership
Lease transfers the asset to the lessee at the end of the lease term
O – Option to purchase the asset
The lessee has the option to purchase the asset at a price sufficiently
lower at the FV of the date when the option becomes exercisable
NOTE: dapat stated sa problem na “at the inception of the lease, it must
be reasonably certain that lessee would exercise the option”
M – Material lease term
Lease term is the major part of the economic life of the asset
Lease term is at least 75% of the useful life of the asset
S – Substantial PV of lease payments
Present value of the lease payment amounts to substantially all of the
FV of the underlying asset
PV of the lease payments are at least 90% of the FV of the asset
T.O = asset is reverted to the lessee
Hindi na babalik kay lessor yung asset
M.S = asset is reverted back to the lessor
Babalik pa yung asset kay lessor
Operating lease – Lessor
Lease payments are recognized as income
o When problem is silent = Straight line basis
Every lease payment for each period is equal
o When given different lease payment amounts per period
Get the average of all lease payments
EXAMPLE:
Year 1 100,000
Year 2 150,000
Year 3 110,000
Total 360,000
Annual lease payment = 360,000/3 years
= 120,000
Question 1: What amount of rental revenue should be reported in the income statement for the
year ended September 30, 2022?
Given: 3,000 per square meter per year Lease term: 1,000 square
1,200 per square meter for the first year meters for 3 years
Solution:
Solution:
Question 3: What amount should be recorded as rent receivable from Ivana Company on
December 31, 2018?
Question 5: What amount should be reported as rent revenue for the current year?
Examples:
1. Gross investment
Annual rental = 1,518,650 / 3.0373
= 500,000
Gross Investment = 500,000 * 4 years
= 2,000,000
2. Net Investment
= 1,518,650 + 66,300
= 1,584,950
3. Unearned Interest Income
= 2,000,000 – 1,584,950
= 415, 050
4. Carrying amount of Lease Receivable on Dec 31, 2022
Carrying amount end = Carrying amount beg x (1 + Rate) – Payment
Carrying amount
1/1/2022 1,518,650 + 66,300 1,584,950
12/21/2022 1,584,950 * (1+0.1) – 500,000 1,243,445
5. noncurrent portion of the lease receivable on Dec 21, 2022
= 1,243,445 * (1+0.1) – 500,000
= 867,790
6. Current portion of the lease receivable on Dec 21, 2022
= 1,243,445 – 867,790
= 375,655
1. Annual rental
= 3,760,100 - (400,000 *0.6830)
= 3,486,900 / 3.4869
= 1,000,000
2. Gross Investment
= (1,000,000 * 4) + 400,000
= 4,400,000
3. Net Investment
= 3,760,100
4. Unearned Interest Income
= 4,400,000 – 3,760,100
= 639,900
1. Annual Rental
= 3,449,600 / 4.312
= 800,000
IGNORE RESIDUAL VALUE KASI MAY TRANSFER OF OWNERSHIP
2. Gross Investment
= 800,000 *5 years
= 4,000,000
3. Net Investment
= 3,449,600
4. Unearned Interest Income
= 4,000,000 - 3,449,600
= 550,400
1. Gross Investment
= (800,000 * 5) – (200,000)
= 4,200,000
2. Net Investment
= (800,000 * 3.7908) + (200,000 * 0.6209)
= 3,032,640 + 124,180
= 3,156,820
3. Unearned Interest Income
o = 4,200,000 – 3,156,820
o = 1,043,180
4. Sales
o = 3,156,820
5. COGS
= 2,000,000 + 100,000
= 2,100,000
6. Gross Profit
o = 3,156,820 - 2,100,000
o = 1,056,820
7. Carrying amount on December 21, 2022
o = 3,156,820 *(1+0.1) – 800,000
= 2,672,502