Wow! Wow! and more wow's!!! I can't remember how many videos I watched, in search of "Right-of-use asset" calculation but none of them helped. May God expand your territory sir.👏👏👏 Keep it up!! As I subscribe!!!
I appreciate your efforts sir,ride on💪...but the amortization schedule for advance is different from that of arrears, pls corrext me if am wrong coz am actually confused😢
Thanks for patronizing my channel. Yes, you are right! The amortization for "advance" is different from that of "arrears" because of the "timing" of lease payments. With the advance, lease payments are made before interest is calculated on the outstanding balance. On the other hand, with the arrears, interest is calculated on the opening balances before lease payments are made. I hope this helps.
Sir, thank you for the video, this is the only thing that answer my question so far. I would like to know, if in the first year you pay for, let's say two months rent, while maintaining the amount monthly annuity will it be recognised as and advance payment or a reduction in the lease liability principal? Thank you have a nice day.
Thanks for the video. How do one account for the lease liability of a 5years contract with 2years prepaid at commencement date? How do you unwind the lease liabilities for the 5years ?.
I think with the payment made in an advance, that amount should be deducted from the opening balance in the amortization schedule and interest should be charged on the outstanding balance before moving to the next year.
I it should be ignored since it is present in the current liability of 14 397 500🤔.....we will subtract it after the payment has been made....I guess....but just think general I guess sir🤔
Since 2019 is the second year, I multiplied the annual depreciation charge of 1,714,250 by 2 to get the 2019 accumulated depreciation (i.e. 1,714,250 x 2 =3,429,500)
Good evening Sir...thank you for this clear explanation. But then i still dont understand why the initial lease payment made in the beginning of the year 2018 was not recognized in the subsequent measurement as the lease amount didnt reduce as at 2018 year-end. I mean isn't the advanced payment supposed to reduce the liability just as its done for 2019? Please explain further
Hi sir Request you kindy explain how to do journal transaction in liability said As per we now right of use asset Transaction in will be Cr accumulated right of use asset Dr depreciation
Thanks sir....but I have a concern, you used the initial lease payment of 2500 000....you then added it to the right of use asset....were you not supposed to ignore it since it is present in the current liability ?? I feel like you have double counted🤔
It wasn't added to derive the lease liability. Remember when he computed the annuity, he used 9 years lease /rental payments instead of 10year as the first year's payment is already prepaid. This prepaid amount was what was added to the right of use asset.
Hello Tuwiilika, thank you for patronizing my tutorial video and for your question. This amortization schedule applies exclusively to the case where lease payments are made in advance (that is, where payment is made at the beginning of the period). Where lease payments are made in advance, the first payment is recognized as part of the Right-of-Use Asset (AND NOT IN THE AMORTIZATION SCHEDULE). That is why no lease payment was recognized in the amortization schedule for the year 2018. I hope this helps.
Thanks for patronizing my channel, Atta Poku. It is because the 2018 lease payment (made at the beginning of the year) had already been factored into the calculation of the initial lease liability and Right-of-Use Asset. Thus, subtracting it again will be tantamount to a "double treatment" of the 2018 lease payment. I hope this helps.
best explantation in the Internet, so far!!! Thank you !!!
Thank you Sir George, excellent lecture
I love your explanation
Well done !! good and clear approach keep it up!!
Good morning
Your is good, and kindly do more on the various standards.
That was a perfect presentation. I going to look for the next
Wow! Wow! and more wow's!!!
I can't remember how many videos I watched, in search of "Right-of-use asset" calculation but none of them helped.
May God expand your territory sir.👏👏👏 Keep it up!! As I subscribe!!!
Thank you so much sir this was very very helpful, highly appreciated 🙏💯
THIS IS GREAT SIR, SHOULD BE NAMING YOUR VIDEOS IN PARTS E.G PART 1, PART 2
Well noted, Miguel. Thank you!
Good tutorials, keep it up.
thank you sir for this, its really clear teaching
You are most welcome
Very well understood. Keep it up sir
This video is so explicit ..thank you
fantastic explanation and really good hand writing
An exquisite presentation!
Very good one Sir
Many thanks!
Thank you very much.
This really helped
Thank you Mr. Savio great explanation !
Thank u, quite simplified. Just an observation - under YE 2019 - the outstanding bal. is 13,337,500 {15,837,500 - 2,500,000}.
I thought about this and even had to message him for clarifications
Thank you
Very useful. Thank you so much
Excellent explanation!
I appreciate your efforts sir,ride on💪...but the amortization schedule for advance is different from that of arrears, pls corrext me if am wrong coz am actually confused😢
Thanks for patronizing my channel.
Yes, you are right! The amortization for "advance" is different from that of "arrears" because of the "timing" of lease payments.
With the advance, lease payments are made before interest is calculated on the outstanding balance.
On the other hand, with the arrears, interest is calculated on the opening balances before lease payments are made.
I hope this helps.
Thank you,!!
Good work sir
Thank you appreciated
thanks man, it helps a lot
thanks sir foe this is very helpful...
THANK YOU!
I love it
Glad to hear that, Sir
Sir, thank you for the video, this is the only thing that answer my question so far. I would like to know, if in the first year you pay for, let's say two months rent, while maintaining the amount monthly annuity will it be recognised as and advance payment or a reduction in the lease liability principal? Thank you have a nice day.
It will be recognized as an advance payment.
Well explained
At 9:17 can you show me how the double entry will be? The cash increased and decreased in this transaction
Thanks for the video. How do one account for the lease liability of a 5years contract with 2years prepaid at commencement date? How do you unwind the lease liabilities for the 5years ?.
Why was the annual lease payment for the 2018 year ignored in the subsequent measurement
I am failing to understand how you have calculated the annuity factor of 5.759.May you demonstrate on the calculator please
👍
Presentation is excellent however what do we do if the lease is paid monthly in advance?
Excellent
Thanks
you have really made it clear, was wondering how its done for payment in advance
Sir.., Annuity payments can also be calculated as For Year 1-9 at PVAF 10%, (10-1YEARS)..
Yes please
I think with the payment made in an advance, that amount should be deducted from the opening balance in the amortization schedule and interest should be charged on the outstanding balance before moving to the next year.
Yes please...That's exactly what's in the video...Kindly check again
I it should be ignored since it is present in the current liability of 14 397 500🤔.....we will subtract it after the payment has been made....I guess....but just think general I guess sir🤔
Please can u do a video on this but lease rentals are paid semi annually?
How did you get the Accumulated depreciation of 2019 which is 3,429,500?
Since 2019 is the second year, I multiplied the annual depreciation charge of 1,714,250 by 2 to get the 2019 accumulated depreciation (i.e. 1,714,250 x 2 =3,429,500)
@@georgesaccountingtutorials thanks much
It's been deducted in annuity calculation. That's , instead of 10yrs he used 9yrs
Good evening Sir...thank you for this clear explanation. But then i still dont understand why the initial lease payment made in the beginning of the year 2018 was not recognized in the subsequent measurement as the lease amount didnt reduce as at 2018 year-end. I mean isn't the advanced payment supposed to reduce the liability just as its done for 2019?
Please explain further
Oh i guess this is clear. Thank you
How can I like this video 2 times...😅
Hi sir
Request you kindy explain how to do journal transaction in liability said
As per we now right of use asset
Transaction in will be
Cr accumulated right of use asset
Dr depreciation
Is The beginning the same as
Payment in advance
Thanks sir....but I have a concern, you used the initial lease payment of 2500 000....you then added it to the right of use asset....were you not supposed to ignore it since it is present in the current liability ?? I feel like you have double counted🤔
It wasn't added to derive the lease liability. Remember when he computed the annuity, he used 9 years lease /rental payments instead of 10year as the first year's payment is already prepaid. This prepaid amount was what was added to the right of use asset.
I am still finding it confusing to understand your amortisation schedule sir, I could really use a bit more of explanation on the table.
Hello Tuwiilika, thank you for patronizing my tutorial video and for your question.
This amortization schedule applies exclusively to the case where lease payments are made in advance (that is, where payment is made at the beginning of the period). Where lease payments are made in advance, the first payment is recognized as part of the Right-of-Use Asset (AND NOT IN THE AMORTIZATION SCHEDULE). That is why no lease payment was recognized in the amortization schedule for the year 2018.
I hope this helps.
Can you do a video on deferred tax consequences ofIRFS 16
Noted, please
Why was the annual lease payment for the 2018 year ignored in the subsequent measurement
Thanks for patronizing my channel, Atta Poku.
It is because the 2018 lease payment (made at the beginning of the year) had already been factored into the calculation of the initial lease liability and Right-of-Use Asset. Thus, subtracting it again will be tantamount to a "double treatment" of the 2018 lease payment.
I hope this helps.