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WorksheetsIFRS - Are we good to go - IFRS 16 - W10
Total questions: 10
Worksheet time: 21mins
Which of the following shall a lessee recognise at the commencement date?
A right-of use asset
A lease liability
Deferred tax liabilities/assets
A and B
C enters into a 5 year lease of an item of plant on 1 January 2017. The annual rentals are $11.5 million, with the first instalment paid on 31 December 2017. The present value of minimum lease payments are $50 million and the interest rate implicit in the lease is 5% per annum.
Calculate the liability to be recognised in the statement of financial position at 31 December 2018?
41,000,000
40,425,000
31,550,000
30,371,250
The lease liability should be remeasured by discounting the new lease payments using an unchanged discount rate when which of the following situation occurs?
The lease term is extended
There is a change in the assessment of an option to purchase
There is a change in the amount expected to be payable under a residual value guarantee
The lease term is reduced
Which of the following events may indicate the Right-of-Use (ROU) asset is impaired?
A significant adverse change in the way the underlying asset is being used, or in the physical condition of the underlying asset
A significant adverse change in the business climate or legal factors combine to impact the value of using the underlying asset
The market price of the underlying asset decreases significantly
All of the above
Which of these scenarios will result in a lease modification that increases the lease liability?
The landlord and tenant agree to reduce the space outlined in the original lease agreement.
The landlord and tenant agree to extend the lease term an additional five years.
The tenant reassesses a purchase option they were previously reasonably certain to exercise, as not reasonably certain to exercise.
The tenant enters into an agreement with the landlord to lease an additional asset at the current fair value.
All of the following leases are excluded from IFRS 16 except:
Long term leases of land
Leases to explore minerals, oil, and natural gas
Licenses of intellectual property granted by a lessor
Service concession agreements
Under IFRS 16, how is the right-of-use (ROU) asset remeasured when a lease is amended to reduce the scope of the underlying asset?
The ROU asset remains the same
The ROU asset is adjusted by the proportionate change in the lease liability
The ROU asset is adjusted by the amount of the remeasurement of the lease liability
The ROU asset is adjusted by the proportionate change in the remaining ROU asset
Lessee B leases a retail store from Lessor C under the following terms:
- The written contract is for a stated maximum term of five years
- B and C each have the unilateral right to terminate the lease at the end of Year 2 with no more than an insignificant penalty
- Relevant laws and regulations that govern the transaction do not stipulate any other rights and obligations of the parties in addition to those in the written contract
What is the enforceable period?
2 years
5 years
Judgments
3 years
What is lease modification?
Increase in scope
Change in consideration
Decrease in scope
All A-B-C
On 1 January 20X7, John took out an operating lease for a tractor for a period of 3 years. The annual lease payments of $50,000 are paid in advance.
The market interest rate is 8% and the interest rate implicit in the lease is 9%.
In terms of IFRS 16, what is value of the lease asset (if any) that will be recognised in John’s accounting records?
0
128,855
137,956
139,165
