An equipment finance company, Velaris, makes available to a laboratory a spectrometer whose fair value is 116,087. The broker commissions and legal fees directly related to concluding the lease amount to 2,400. The laboratory pays 41,500 at the end of each of the 3 years of the lease; Velaris will then recover the device, whose unguaranteed residual value is estimated at 9,000. The implicit rate, which includes these initial direct costs, is 6 %. What amount of net investment does Velaris recognise at the commencement date (rounded to the euro)?
- Fair value of the spectrometer
- 116,087
- Initial direct costs
- 2,400
- Annual payment at the end of each year
- 41,500
- Number of years of the lease
- 3
- Unguaranteed residual value
- 9,000
- Interest rate implicit in the lease
- 6 %