NO finance income accrued
capital repayments = principal amount on calc
ADVANCE
pmt 1 OB PMT YE
current year
finance income accrued prev year finance income accrued
capital repayments
,FINACIAL STATEMENTS
Statement of financial position as at 31 December 20.2 20.2
Assets
Non-current assets
Factory (asset leased out)
Net investment in finance lease This is balance on you HP calculator for the end
of the NEXT year
SO if you are in year 1 and there is 12 payments
per year THEN the balance at the end of the
NEXT year will be 24 input 24 balance
Current assets
Short-term portion of net investment in finance lease This is the balance at the end of the current year
MINUS the long term portion above
So 12 payments per year and you are in year one
then :
12 input 12 balance MINUS 24 input 24 balance
Accrued lease income (for an operating lease)
Equity & liabilities
Non current liabilities
Deferred tax
Statement of comprehensive income for the year ended 31 December 20.2
Finance income received (from the lessee) Interest for your
current year from
HP calculator
Profit before tax
Taxation
Profit after tax
Other comprehensive income
Total comprehensive income
, NOTES TO THE FINANCIAL STATEMENTS
4. Net investment in finance lease (FINANCE LEASE)
Computer equipment are being leased out in terms of a finance lease agreement. Equal monthly instalments of R45 000
is receivable until 31 December 2010 at an interest rate implicit in the lease of 13.12% per annum. The lease term is 10
years and the commencement date is 1 January 20.1. (.93)
reconciliation of net investment in finance lease (.94)
opening balance (balance) (closing balance of prev yr)
(so x input x balance , this the last payment balance of the previous
year)
new leases entered into
capital repayments (principle) ()
this is the principle amount on the HP calculator
So if you have 12 payments in the first year
1 input 12 amort principle
IMPORTANT: payments in middle of year:
Principle + interest accrued prev yr
If you have a payment half way through the year there is interest on
that payment
So you say 1 input 1 principle + that portion of interest which
accrued from the previous year because that interest is now paid
when we make the actual payment
finance income accrued (interest) +
IMPORTANT: payments in middle of year (examples below)
Apportion the interest for the interest portion of the next payment
that happens in the current year
lease modification
closing balance This closing balance goes in the maturity analysis for net
investment
➔ It is the total at the bottom
Summary block for the note info:
1) What is being leased
2) Installments payable until when
3) Implicit interest rate
4) Lease term
5) Commencement date
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