IFRS 16 · Workpapers (Step 4 of 5)
Workpaper assignment
- Course
- Exercises
- Case studies
- Workpapers
- Exams
Lessee initial measurement: lease liability and right-of-use asset
Office lease for the lessee: lease liability, right-of-use asset and first year
Section 1 of 9
Objective
Section brief
- What to document
- The engagement, its scope and the working mode chosen.
- Why
- A workpaper answers one precise question: framing it avoids off-topic work.
- How
- Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
- Expected result
- You know which question the workpaper must settle, and for which reporting date.
- Your role
- Preparer of the IFRS 16 workpaper
- Level
- Foundation
- Estimated time
- ≈ 35 min
- Progress
- 0 / 5 steps done (review excluded)
Context
Studio Arvel (a fictitious company), an architecture firm, closes its accounts on 31 December and applies IFRS 16. On 1 January 20X1, it leases an office floor in a building owned by Foncière Talmont (a fictitious lessor). According to the case data, the contract is a lease under IFRS 16, Studio Arvel is the lessee and no exemption is applied. You are preparing the accounting at the commencement date and the 20X1 year-end.
Assignment
Workpaper Lessee initial measurement: lease liability and right-of-use asset.
Purpose of the workpaper
List the lease payments not yet paid at the commencement date, discount them at the rate retained, determine the cost of the right-of-use asset (lease liability, advance payments less incentives, initial direct costs, restoration) and record the initial recognition entry.
Questions of the file covered by this workpaper
- Calculate the lease liability at the commencement date.
- Calculate the cost of the right-of-use asset.
- Which entry do you record at 1 January 20X1?
Documents in the file
Open the documents to pick out the relevant information.