Download as:
Rating : ⭐⭐⭐⭐⭐
Price: $10.99
Language:EN
Pages: 2
Words: 236

You are viewing 1/3rd of the document.
Purchase the document to get full access instantly.

Immediately available after payment
Both online and downloadable
No strings attached

And the expected residual value the end that time

On 1 July 2015 Malaysian Transport Ltd entered into a non-cancellable agreement with the Zi-Lease Company to lease three trucks for five years. The trucks were not part of Zi-Lease’s inventory. The lease agreement requires Malaysian Transport to make half-yearly payments of $ 140000 on 1 July and 1 January each year, commencing on 1 July 2015. The residual value is unguaranteed and there is no bargain purchase option. The interest rate implicit in the lease agreement is 4.5% per half-year. Under the lease agreement, Malaysian Transport is responsible for the maintenance and insurance of the trucks. The fair value of the trucks at the inception of the lease was $ 1275 000, their estimated useful life is seven years, and the expected residual value at the end of that time is $500 000. Malaysian Transport Ltd incurred legal costs of $ 5000 in drawing up the lease.

Required

Question 2 (20%) ( Word count not to exceed 500 word limit)

Outline the accounting treatment of leases by lessees proposed in the IASB Exposure Draft ‘ Leases’ 2010. Are these proposals likely to overcome the problems experienced with the present finance/operating lease distinction? Explain

Copyright © 2009-2023 UrgentHomework.com, All right reserved.