lease contract

 lease Article

Report prepared pertaining to

ACCG 224: Advanced Financial Accounting

Changes to 'Lease' accounting

and its impact on the financial position and the performance of Qantas

Table of Content material

1 . Advantages P. 2

2 . Glossary P. 3

3. Debate P. some

3. one particular Description in the current lease contract contract P. 4 several. 1 . 1 Finance Leased and Work with Purchase Assets P. 5 3. 1 . 2 Working Lease P. 6 a few. 2 Brief summary of the suggested changes to rent accounting P7 3. three or more Analysis L. 8

4. Conclusion and Recommendation L. 10 a few. Referencing L. 11

1 . Introduction

Qantas Airways Limited (Qantas) can be described as for-profit organization limited by stocks, incorporated in Australia whose stocks and shares are public in the Australian Securities Exchange (ASX). It is engaged in the operation in the international and domestic air flow transportation services. According to the Qantas annual report (2013 S. 6), it states which the statutory income after taxes amounts to $6 million and root profit prior to tax portions for$192 million for the 2012/2013 economical year. The internal performance can be reflected in the Consolidated Financial Assertions, which are general purpose financial claims. Those assertion including "balance sheet", income assertion, statement of changes in value and declaration of cash movement have been prepared in accordance with Australian Accounting Standard (AASBs) used by the Aussie Accounting Regular Board (AASB) and the Businesses Act 2k. The Consolidated Financial Claims also conform to International Monetary Reporting Requirements (IFRSs) and interpretations followed by the Foreign Accounting Standards Board (IASB). This survey focuses on the lease accounting of Qantas group. Qantas, as a lessee, has material amounts of both equally finance and operating leases and provides different methods for those leases in accounting. The initially part of the statement examine the present lease products in terms of classification, recognition and measurement depending on the 2013 annual statement of Qantas according to AASB 117. And then, the 2nd part regards the new lease accounting treatment. The potential affects on the company's financial position and performance will be analysed as the proposed improvements adopt.

installment payments on your Glossary

1 ) Bargain purchase option

Passage 4 of AASB 117 (2010) declares that it is a possibility to purchase the asset in a price substantially lower than the fair value at particular date the option becomes exercisable, in order that it is reasonably sure that the option will be exercisable. installment payments on your Present worth of the minimal lease payment

Minimum lease contract payments will be defined as (AASB117, paragraph some, 2013) the payment above the lease term that the lessee is required to produce together with any kind of amounts guaranteed by lessee or with a party related to the lessee, excluding contingent rent, costs for solutions and taxes to be paid by and reimbursed for the lessor company. 3. Gross Margin

Gross margin is the a provider's total revenue revenue without its cost of products sold (COGS), divided by total revenue revenue, stated as a percentage. The gross margin presents the percentage of total product sales revenue the company is still after taking on the direct costs associated with producing the goods and services that sells. The larger the percentage is usually, the more the organization remains on each of your dollar of sales to service their other costs and requirements (Scott DL, 2003).

several. Discussions

several. 1 Description of the current lease deal

3. 1 ) 1 Financial Leased and Hire Purchase Assets

Determine 1 Financial lease and hire order commitment

Origin: Qantas Annual Report, 2013

The Qantas Group leases...


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