FRF7

Section A: Q3

Specimen exam

Q3 Section A

2 marks

This question relates to IAS 17 - Leases, which is not valid anymore...

On 1 October 20X4, Flash Co acquired an item of plant under a five-year lease agreement.

The present value of the total lease payments was $25m.

The agreement had an implicit finance cost of 10% per annum and required an immediate deposit of $2m and annual rentals of $6m paid on the 30 September each year for five years.

Calculate the current liability of the lease in Flash Co's statement of financial position as at 30 September 20X5.

Input your answer in the following format, e.g. 1234567
(Don't use commas or decimal points etc.)
$