Case 11-6 Lessee Ltd. Case 11-6 deals with Lessee Ltd.‚ a company that operates in Britain and uses IFRS. The question in this case is how to classify a lease that Lessee‚ Ltd. acquired from Lessor Inc. The accounting standard that deals with leases under IFRS is IAS 17. IAS 17 was originally issued in September 1982 and was reissued in December 2003. It classifies leases as either finance leases or operating leases. Finance leases make it so that the lessee recognizes an asset and a liability
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CASE 11-6: LESSEE LTD Caleb Aytes Brayden Hudson Brian Laws Katie Vittetoe Topics To Be Discussed • • • • Relevant Facts of the Case IFRS US GAAP Real World Relevant Facts of the Case • Lessee Ltd. – British Company that applies IFRS – Leases equipment from Lessor Inc. – 3 years – No purchase or renewal options & equipment reverts back to Lessor when lease expires – Remaining useful life = 4 years – Guaranteed Residual Value of $20K Accountants Analysis Relevant Questions 1. Was the junior
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Case 11-6 Lessee Ltd. Lessee Ltd.‚ a British company that applies IFRSs‚ leased equipment from Lessor Inc. on January 1‚ 2007‚ for a period of three years. Lease payments of $100‚000 are due to Lessor Inc. each year. Other expenses (e.g.‚ insurance‚ taxes‚ maintenance) are also to be paid by Lessee Ltd. and amount to $2‚000 per year. The lessor did not incur any initial direct costs. The lease contains no purchase or renewal options and the equipment reverts back to Lessor Inc. on the expiration
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| Lessee Ltd.- Lease Case | | | | | | 1. Was the junior accountant’s analysis correct? Why or why not? No‚ the junior accountant’s analysis is not correct in classifying the lease as an operating lease in accordance with IFRS. Whether or not a lease is classified as a finance or an operating lease depends on if all of the benefits as well as risks of ownership have been shifted from the lessor to the lessee. According to IAS 17-10(d)‚ a lease must be classified as a finance
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following updates to the existing cases should be noted. Case 03-5a Part I: Trademark Subsequent to the release of the Exposure Draft issued by the FASB and IASB in June 2010 the Boards received a number of comments and is currently reviewing and analyzing these comments. A revised draft of the Exposure Draft is expected in Q3 of 2011. We encourage users of this case study to follow this project and review the FASB’s and IASB’s Web site for updates. Case 04-9: Healthcare Depot On April 22
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prospectively. This FSP is not yet included within the ASC‚ however‚ prior to the ASC effective date we would expect this guidance to also be incorporated into ASC 820-10. As noted in Addendum – 2007 above‚ the conclusions reached in the above case were not affected by ASC 820-10 (Statement 157); however‚ ASC 820-10 (Statement 157) may affect how Ace Company measures the fair value of the forward purchase contract and‚ therefore‚ how the proceeds are allocated between the purchase contract
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Technology‚ Media & Telecommunications Predictions 2013 Contents Foreword3 Technology5 The PC is not dead: it’s about usage not units6 Bring your own computer: a tale of two interpretations9 P@$$1234: the end of strong password‑only security11 Enterprise Social Networks: another tool‚ but not yet a panacea14 Let’s get together: crowdfunding portals bring in the bucks16 The button stays beautiful19 Media23 4K kicks off24
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Runway offers existing customers (the “Existing Customer”) a $25 credit (the “$25 Referral Credit”) if the Existing Customer refers a friend (the “New Customer”) to Runway’s Web site and the New Customer purchases merchandise from Runway. After a purchase is made by the New Customer‚ the Existing Customer receives a $25 credit to be applied to a future purchase from Runway. The $25 Referral Credit represents the fair value of the cost Runway would pay to acquire a new customer from an unrelated
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Zhifeng Liu 0892996 Colloquium 7 – Summary of Deloitte Deloitte is one the Big 4 public accounting firms. It has over 190‚000 employees worldwide‚ and there are 100 offices in the United States. In the colloquium‚ we met Jorge Caballero who is one of the Deloitte Tax LLP partner. Jorge was born in Cuba and immigrated to Connecticut‚ U.S. when he was 10. His father passed away one month after they arrive in U.S. Jorge started working when he was 12 to do gardening and other chores for only
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1. Is Eye Vision’s arrangement with Holland Hospital within the scope of ASC 985-605‚ Software: Revenue Recognition? In this case‚ the main content of the Eye Vision’s arrangement with Holland Hospital include embedded software medical equipment and an initial option to purchase a two-year separately priced maintenance agreement. In this case‚ because“Eye Vision has never sold‚ nor does it offer to sell‚ the Clear View Laser without the embedded software because the software is necessary to perform
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