ACCA FR · Chapter 6 · Question 6 of 9
On 1 July 20X5 Robin Co took a 10-month lease of storage space at $2,000 a month, with the first month rent-free. Robin Co applies the IFRS 16 short-term lease exemption. What expense should be recognised for the year ended 31 December 20X5?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $10,800
Explanation
Total payments = (10 - 1) x $2,000 = $18,000. Under the exemption this is expensed on a straight-line basis over the 10-month term: $1,800 a month. Expense for July to December = $1,800 x 6 = $10,800. The amount actually paid in the period ($10,000) is not the expense.
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