Financial Accounting an der University Of The Western Cape | Karteikarten & Zusammenfassungen

Lernmaterialien für Financial accounting an der University of the Western Cape

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TESTE DEIN WISSEN
Define Lease 
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TESTE DEIN WISSEN
A contract that conveys the right to use an asset for a period of time in exchange for consideration .
The asset must be an identified asset & 
The entity must have a right to control the use of the asset IFRS16.9
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TESTE DEIN WISSEN
Define control 
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TESTE DEIN WISSEN
The right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset 
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TESTE DEIN WISSEN
Explain Right to direct use pB24 , 28 and 30
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TESTE DEIN WISSEN
  • Customer has right to direct how and for what purpose the asset is used throughout the period of use; or 
  • The relevant decisions are pre-determined (customer has the right to operate asswt without supplier blocking) 
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TESTE DEIN WISSEN
Under which options/changes do we use an updated interest rate?
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TESTE DEIN WISSEN
A change in the lease term / option to purchase the underlying asset 
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TESTE DEIN WISSEN
Explsin , B21 - Right to obtain economic benefits from use 
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TESTE DEIN WISSEN
To control the use of an identified asset,a customer is required to have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.

For example, a wind farm that generates electricity. If I buy into the farm for the electricity, that is the right of use of the asset , however anything that stems from ownership of the farm for example tax benefits relating to the construction of the farm, is not from USE OF THE ASSET , thus it does not fall under the criteria. 

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TESTE DEIN WISSEN
Define identified asset 
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TESTE DEIN WISSEN
The asset can be physically distinct and the supplier has no substantive substitution rights 
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TESTE DEIN WISSEN
How are right of use assets accounted for ? 
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TESTE DEIN WISSEN
  • Cost model ( acc depr & acc impairment)
  • Reval Model (only for PPE) 
  • FV model (only for IP)
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TESTE DEIN WISSEN
What does it mean when we refer to "capacity portion" 
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TESTE DEIN WISSEN
We need to recognize whether we have an identified asset by asking ourselves, Rather Than is it a physically distinct asset, we deal with only a certain capacity of the asset for example only 20% off pipeline. 

When dealing with a capacity portion we must analyze whether the capacity portion is physically distinct or, if not , whether it represents substantially all of the assets capacity. I.e does the 20% represent a physically distinct portion of the pipeline 
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TESTE DEIN WISSEN
What is the tax base of a right of use asset?
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TESTE DEIN WISSEN
  • If the asset will result in taxable future benefits then TB = deductions allowed against those economic benefits 
  • If the asset does not result in taxable future benefits then TB = CA
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TESTE DEIN WISSEN
Upon who is depreciation granted and why?
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TESTE DEIN WISSEN
The lessor . Because SARS sees the lease as a rental agreement 
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TESTE DEIN WISSEN
If I say the use of an asset is "exclusive" what does it mean ?
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TESTE DEIN WISSEN
Exclusive meaning only I can use it ,nobody else can. So we are obtaining substantially all the economic benefits from the use of the asset 
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TESTE DEIN WISSEN
How is the lease term calculated ?
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TESTE DEIN WISSEN
Non-concellable period + extension periods (if certain to exercise renewal option) or periods covered by an option to terminate the lease if lessee is reasonably certain not to exercise that option 
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Q:
Define Lease 
A:
A contract that conveys the right to use an asset for a period of time in exchange for consideration .
The asset must be an identified asset & 
The entity must have a right to control the use of the asset IFRS16.9
Q:
Define control 
A:
The right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset 
Q:
Explain Right to direct use pB24 , 28 and 30
A:
  • Customer has right to direct how and for what purpose the asset is used throughout the period of use; or 
  • The relevant decisions are pre-determined (customer has the right to operate asswt without supplier blocking) 
Q:
Under which options/changes do we use an updated interest rate?
A:
A change in the lease term / option to purchase the underlying asset 
Q:
Explsin , B21 - Right to obtain economic benefits from use 
A:
To control the use of an identified asset,a customer is required to have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use.

For example, a wind farm that generates electricity. If I buy into the farm for the electricity, that is the right of use of the asset , however anything that stems from ownership of the farm for example tax benefits relating to the construction of the farm, is not from USE OF THE ASSET , thus it does not fall under the criteria. 

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Q:
Define identified asset 
A:
The asset can be physically distinct and the supplier has no substantive substitution rights 
Q:
How are right of use assets accounted for ? 
A:
  • Cost model ( acc depr & acc impairment)
  • Reval Model (only for PPE) 
  • FV model (only for IP)
Q:
What does it mean when we refer to "capacity portion" 
A:
We need to recognize whether we have an identified asset by asking ourselves, Rather Than is it a physically distinct asset, we deal with only a certain capacity of the asset for example only 20% off pipeline. 

When dealing with a capacity portion we must analyze whether the capacity portion is physically distinct or, if not , whether it represents substantially all of the assets capacity. I.e does the 20% represent a physically distinct portion of the pipeline 
Q:
What is the tax base of a right of use asset?
A:
  • If the asset will result in taxable future benefits then TB = deductions allowed against those economic benefits 
  • If the asset does not result in taxable future benefits then TB = CA
Q:
Upon who is depreciation granted and why?
A:
The lessor . Because SARS sees the lease as a rental agreement 
Q:
If I say the use of an asset is "exclusive" what does it mean ?
A:
Exclusive meaning only I can use it ,nobody else can. So we are obtaining substantially all the economic benefits from the use of the asset 
Q:
How is the lease term calculated ?
A:
Non-concellable period + extension periods (if certain to exercise renewal option) or periods covered by an option to terminate the lease if lessee is reasonably certain not to exercise that option 
Financial accounting

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