IFRS 16Chapter 2Lesson 1
The vocabulary of IFRS 16
Step 1 of 8Learning objectives
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The terms defined in Appendix A that drive the whole standard: inception date and commencement date, lease term, lease payments and lease incentives, interest rate implicit in the lease and incremental borrowing rate, gross and net investment, unguaranteed residual value, economic life and useful life.
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Learning objectives
- Distinguish the inception date from the commencement date and know what happens at each.
- Identify in a contract the items that are lease payments and the lease incentives.
- Distinguish the interest rate implicit in the lease from the incremental borrowing rate and explain which one the lessee can use.
- Distinguish the lessor-specific terms (gross and net investment, unguaranteed residual value) and economic life from useful life.