Paragraph 15A of AASB 117 requires that when accounting for leases of land and buildings the value of the land should be:

Question

Quizplus · Accepted Answer

Paragraph 15A of AASB 117 requires that the value of the land should be treated separately for the purpose of the lease. This means that when accounting for leases of land and buildings, the value of the land should be recognized separately from the buildings erected on the land. This is because the land itself usually has an indefinite economic life, whereas the buildings have a finite economic life. By recognizing them separately, it allows for more accurate depreciation and amortization schedules, which can help to better match expenses with the revenues that they help to generate.

Paragraph 15A of AASB 117 Requires That When Accounting for Leases