08-20-2009, 04:02 AM
AoA
If an entity pays Rs.10M to use an asset for 6 months and after six months Rs.10M will be returned by party from whom asset was hired, what would be the accounting treatment of this transaction.
Facts
Asset Cost 50M
Year End 31 December 2008
Date of Transaction 01 March 2008
Amount Paid 10M
Use of asset 6 months
Amount Returned By Party 10M
No risk reward transfered to entity
Management has no intention to buy asset at end of 6 months.
Please suggest me appropriate accounting treatment.
Regards,
Nabeel Anwer
If an entity pays Rs.10M to use an asset for 6 months and after six months Rs.10M will be returned by party from whom asset was hired, what would be the accounting treatment of this transaction.
Facts
Asset Cost 50M
Year End 31 December 2008
Date of Transaction 01 March 2008
Amount Paid 10M
Use of asset 6 months
Amount Returned By Party 10M
No risk reward transfered to entity
Management has no intention to buy asset at end of 6 months.
Please suggest me appropriate accounting treatment.
Regards,
Nabeel Anwer
