Accounting standards

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 January 2011 Hi Experts,
X ltd comapny brought an asset on lease basis for 10 years(subtantial period) and hence given treatment according to AS-19 as finance lease.However after the end of 1st year X ltd thought that asset is useful for one more year then in such case what should be the treatment in the 2nd year?what abt the treatment given in 1st year

pls guide me

Vivek Raju P

Vivek Raju P (Expert)
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11 January 2011 even in that case i think the lease will not be cancellable and lease rentals needs to be paid for the total 10 years.

However as the asset will not be useful beyond one more year, impairment loss needs to be taken.