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Finance & Accounting
Pages 7 (1757 words)
IAS 17 “Leases” Lease accounting is generally considered as the one which depends upon the agreements between the parties regarding the use of a particular asset. International Accounting Standard Board (IASB) has outlined the accounting treatment in case of leased assets for both the lessor and the lessee under International Accounting Standard 17 (IAS 17) “Leases”.
Last section of this article critically examines the loopholes in the existing accounting standard followed by a conclusion which summarizes the article. Key Features of IAS 17 This accounting standard is quite comprehensive in its nature such that it encompasses different aspects of leases in a very detailed manner. This section briefly analyzes 1) Scope of IAS 17, 2) Classification of Leases, 3) Accounting by Lessor, 4) Accounting by Lessee, 5) Disclosure Requirements for Lessor and, 6) Disclosure Requirements for Lessee. 1. Scope of IAS 17 The applicability of IAS 17 rests with all the leased assets except the following assets: Natural regenerative resources including oil, gas and other minerals Licensing agreements in respect of videos, manuscript, copyrights, brands, films, games etc. Investment property valued on fair value basis by lessee under IAS 40 Investment property considered as operating lease by the lessor under IAS40 Biological assets considered as finance lease by the lessee under IAS 41 Biological assets considered as operating lease by the lessor under IAS 41 2. Classification of Lease Leases are generally classified into either finance lease or operating lease. ...
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