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My organisation is about to enter a lease arrangement with the authority to possesss some land. Some costs are being incurred as PR to seal the arrangement. can i capitalise such costs?
in IAS 17 - Leases by

1 Answer

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According to IAS-17 any incentive for new or renewal of operating lease by lessee should be recognized a reduction of the rental expenses irrespective of the incentive's nature.
In light of above paragraph lessee cannot capitalize cost. However, accounting with the perspective of lessor will be totally different. Under 2003, IAS-17 revision, initial direct cost incurred by lessor must be capitalized over the lease term. They may no longer be charged to profit and loss when incurred.
by Level 2 Member (4.6k points)


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