AS - 19

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CA Saba Naaz (Querist)
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22 January 2011 What is Gross Investment in Lease as per AS-19 ?
Is it (Minimum Lease Payment + Guaranteed Residual Value + Unguaranteed Residual Value)?
Please answer for both:
From lessor's point of view &
Lessee's point of view

CA Jeen paul

CA Jeen paul (Expert)
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22 January 2011 hello,

this formula is applicable only in the case of finance lease and in the books of lessor
in the case of lesee as per the AS is the deemed onwer of the asset and he should recognise the leased asset at the lower of
Fair valu or Present value of MLP (lessee's view)
whichever is less

formule for finance lease in lessors books gross investment =MLP+unguarenteed residual value(UgRV)

MLP= total lease rent and the guarenteed residual value (GRV) by lessee and third party

so formule in your query is a duplication of GRV.
in simple the GI= total lease rent + GRV+UgRV

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