CvLTAELG1AAv7GMjp8RSaPGsvS8 MGT401 GDB 3 FALL 2012 Discussion open till 28th January 2013 |
Tuesday , 16 October 2018
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MGT401 GDB 3 FALL 2012

Topic to be tested: 

  • Leasing (IAS-17)

Learning objectives: 

  • To learn about the recognition and reporting of profit or loss arisen in lease and lease back transactions as per IAS-17

Discussion Question:

 


Mr. Ali has made an agreement to sell a vehicle to Mr. Ahmad. As per conditions of the agreement, he has taken it back on lease on the same day. Mr.Ali has categorized the lease agreement as operating lease and treated it in accordance with the provisions of IAS-17.  The term for the lease contract is five years. The lease rentals for this contract are as follows:                       

 

Years

Lease Rentals

(Rs.)

1

2,000

2

3,000

3

4,000

4

5,000

5

6,000

 

Required:

How will Mr. Ali account for the profit/loss on the sale of the asset assuming that Sale value = Fair value = Rs. 20,000, if Carrying value is:

1.      Rs. 20,000

2.      Rs. 18,000

3.      Rs. 22,000


GDB INSTRUCTIONS & GUIDELINES:

  • Take help from internet for collecting the information and in depth study of IAS-17 is also required to attempt the successful GDB.
  • Carefully watch Lecture # 26 to 30 and consult the relevant material from handouts along with recommended/reference books.
  • Answer should be relevant and to the point.
  • Attempt the GDB by yourself and do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
  • Your discussion must be based on logical facts.
  • Obnoxious or ignoble answer should be strictly avoided.
  • Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
  • GDB received after the due date will not be considered.

For Detailed Instructions please see the GDB Announcement.

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