P V Gopal (Job) (127 Points)
12 September 2020Dear Experts
Need your help in solving the below.
One informed me on lease rental as below.
But I am unable to calculate how the rent derived and residual value calculated.
Could you please guide me.
Asset Value Rs. 11,40,437
Residual Value Rs. 2,89,688
Repayment period 24 months
GST Rate @ 29.00%
Lease Rental per month Rs. 33,900
GST @ 29% Rs. 9,831
Lease rent in total per month Rs. 43,731
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 12 September 2020
Initial recognition
43,731*24 months= 10,49,544₹
The current leases treatment recognises RIGHT TO USE ASSET and measured initially at full value of the minimum lease payments along with lease liability (payments).
RTU Asset a/c 10,49,544₹
To Lease liability 10,49,544₹
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 12 September 2020
I just remembered that GST is an indirect cost. So, minimum lease payments + direct costs associated with lease - Lease incentives should be recognised initially. That means
RTU Asset a/c 8,13,600 INR
To Lease lability a/c 8,13,600 INR
There is one more thing to work on, you need to discount the future lease payments into PV values. For which, one needs the PV discount rate.
CAclubindia
