$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Upcoming Contribution And Leasing Standards

tag 0 Download5 Pages 1,215 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT


Discuss About The Upcoming Contribution And Leasing Standards?




Lease is a special contract or agreement in which the lessees has to pay the lessor for the use of his/her assets for a specific period of time. Thus, it can be seen that leases are an important aspect in accounting. In lease agreements, the assets have to be tangible in nature. The Australian Accounting Standard Board (AASB) provides some specific guidelines regarding the recognition and measurement of leases in the business organizations and the companies need to comply with these regulations. The main aim of this report is to analyse and evaluate the various aspects regarding lease agreements in the companies.

AASB Lease Recognition Criteria

There are two types of leases; they are Financial Lease and Operating Lease. AASB has different recognition criteria for both the leases. They are discussed in the following section:

Financial Leases:

  • At the date of the commencement of the financial year, the lessor needs to use the implicit rate of interest in the leases for the measurement of net investments. In case, it is not possible for the lessor to determine the implicit rate of interest, it is required for the lessor to use discounted rate for the heading of sublease ( 2017).
  • At the time of measuring the total amount invested in the financial leases of the company, the lessor needs to include initial direct costs other than the manufacturing costs. In addition, the lessor needs to reduce the recognition of the amount of income. The implicit rate of interest in financial leases includes the initial costs of the new lease investments.
  • The lessor needs to recognise the total amount of investments in financial leases based on the pattern reflecting a constant periodical rate of return of the net investments of the lessor ( 2017).

Operating leases

  • The lessor needs to recognize the payments from operating leases, as income and it needs to be done based on either straight line or another systematic basis ( 2017).
  • At the time of the recognition of operating leases, the lessor needs to recognize various costs that include depreciation at the time of earning from leases.
  • The lessor needs to add the initial direct costs of the leases at the time of leases recognition ( 2017).
  • The lessor needs to present the details about all the operating leases in the financial statements at the end of the financial years.

Difference between Operating and Financial Leases

Operating Lease

Financial Lease

·         The risks ands and rewards of asset ownership remain with the lessor (Brealey et al. 2012).

·         The risk and rewards related to the ownership transfer to the lessee.  

·         Operating lease needs to be treated as rents and there is no need to show it in the balance sheet.

·         Financial leases need to be treated like loans and thus, it appears in the balance sheet.

·         There is not any purchase option of the asset in the lease period.

·         Financial leases have the purchase option in the lease period.

·         No running costs of the assets need to be borne(Grinblatt and Titman 2016).

·         Running costs need to be borne and it is higher.

·         The lessor cannot claim any amount for depreciation.

·         The lessor can claim the amount interests as well as depreciation.

·         The lessee has to pay only the monthly lease payments.

·         The lessee has to pay tax, maintained and insurance expenses (Vernimmen et al. 2014). 


As per the 2017 annual report of CSL Limited, on 30 June 2017, it can be seen that the company has reported $3.1 million and $2.5 million in 2017 and 2016 respectively as current lease liabilities; and $22.3 million each for 2016 and 2017 as non-current liabilities. As per the earlier discussion, leases under current liabilities are operating leases; and leased under non-current liabilities are considered as financial leases. Thus, from the above discussion, it can be seen that CSL Limited reported both financial as well as operating leases in 2017 ( 2017).


The new AASB 16 standards help the business organizations in the proper reporting of various financial aspects like leases of assets, liabilities, debts, assets, debt agreements, profits and expenses ( 2017). Previously, the accountants of the companies had to face many difficulties in the recognition of leases, expenses, profits and others. However, with the help of new AASB 16 standards, the accountants have become able to maintain proper disclosure of financial aspects. In case of CSL Limited, it can be seen that the company has been able to segregate the amount of operating lease and financial lease in the most appropriate manner. Apart from the leases, in case of the recognition of expenses and debts, the company has adopted the strategy of fair value in which the market value of the assets and loans has been taken into consideration ( 2017). Thus, from the above discussion, it can be seen that the new AASB 16 framework has overall effective effect on the financial reports of CSL Limited.


From the above discussion, it can be seen that there are two kinds of leases; they are Financial Lease and Operating Lease. For both these two types of leases, AASB 16has different recognition criteria. In addition, the above discussion shows that in financial lease, ownership does not transfer. However, in operating lease, there is not any transfer of ownership. From the financial report of CSL Limited 2017, it can be seen that the company has shown their operating as well as financial leases on a separate basis and this new AASB 16 standard has overall good implication on the company’s financial statements.


References (2017). Accounting standards. [online] Available at: [Accessed 22 Sep. 2017]. (2017). Definition and Recognition of the Elements of Financial Statements. [online] Available at: [Accessed 22 Sep. 2017]. (2017). Leases. [online] Available at: [Accessed 22 Sep. 2017].

Brealey, R.A., Myers, S.C., Allen, F. and Mohanty, P., 2012. Principles of corporate finance. Tata McGraw-Hill Education. (2017). Annual Report 2016/2017. [online] Available at:,0.pdf [Accessed 22 Sep. 2017].

Grinblatt, M. and Titman, S., 2016. Financial markets & corporate strategy.

KPMG. (2017). Impact of AASB 16: the new Leases standard. [online] Available at: [Accessed 22 Sep. 2017].

Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y. and Salvi, A., 2014. Corporate finance: theory and practice. John Wiley & Sons.

Dakis, G.S., 2016. Upcoming changes to contribution and leasing standards. Governance Directions, 68(2), p.99.


Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). Upcoming Contribution And Leasing Standards. Retrieved from

"Upcoming Contribution And Leasing Standards." My Assignment Help, 2018,

My Assignment Help (2018) Upcoming Contribution And Leasing Standards [Online]. Available from:
[Accessed 08 April 2020].

My Assignment Help. 'Upcoming Contribution And Leasing Standards' (My Assignment Help, 2018) <> accessed 08 April 2020.

My Assignment Help. Upcoming Contribution And Leasing Standards [Internet]. My Assignment Help. 2018 [cited 08 April 2020]. Available from: is the perfect solution to render quality solution for all sort of academic issues. We have hired professionals from different fields of study to provide assistance with different subjects. We successfully have provided different types of assignment solutions on 100+ subjects. We have hired industry experts to deliver nursing assignment, hr assignment and finance assignment help. To offer quality content with IT assignments, we have hired IT professionals to render programming language assignment help and IT assignment help for other types of IT assignments as well.

Latest Finance Samples

ACC00207 Hospitality And Tourism Financial Management

Download : 0 | Pages : 5

Answer: Reflective journal writing I am born and brought in a family whose source of income is business. My family has a factory of clothes for infants. Therefore, from my childhood days I am quite acquainted with the accounting terminologies. As I grew up my interest towards business also grew. The importance of accounting terms and the effect of each term has in business I came to know during my course of study. Impact of accounting and its...

Read More arrow

FIN20014 (OUA) Financial Management

Download : 0 | Pages : 7

Answer: Introduction: The assessment aims in evaluating the two-product line that is aimed by ALLCURE Inc. to produce in future, for increasing its revenue generation capability. The analysis is based on Investment appraisal techniques, which is used for detecting the financial viability of the proposed projects. In addition, adequate evaluation of the qualitative analysis has been conducted in the assessment for identifying social viability ...

Read More arrow

FINM202 Financial Management

Download : 0 | Pages : 9

Answer: Introduction: The calculation represented in the above table directly highlights the model, which is being used by Analyst A for valuing the share price of the organisation. The analyst directly believes that there is no possible increment in growth that will be achieved by the organisation in near future. Moreover, the analyst assumes that the company will be profitable in nature but will not grow and remain the small regional compan...

Read More arrow

MBA3304 Business Accounting And Finance

Download : 0 | Pages : 11

Answer: Introduction Every company the financial health to be stabilized for performing better in the market environment and ensuring that business progressing towards a sustainable growth while accomplishing organizational objective using profitability as well as rendering welfare (Mohanram et al., 2018). The process of financial analysis is dependent upon analyzing the financial statements of the company as well as data mining the parameter...

Read More arrow

BUSN3314 Ethical Management And Decision Making

Download : 0 | Pages : 3
  • Course Code: BUSN 3314
  • University: Douglas College
  • Country: Canada

Answer: In many ways the ethical issues are considered as a tiny subject to talk upon however when the ethics is on the basis of the company, the ethical decision models are necessary to compete with other companies in order to have a competitive advantage. Also putting ethics as the last option can create the trouble among the organisation. The company needs to perform ethical practices and the policies to gain the market share and the large ...

Read More arrow

Save Time & improve Grades

Just share your requirements and get customized solutions on time.

We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits




Overall Rating



Our Amazing Features


On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.


Plagiarism Free Work

Using reliable plagiarism detection software, only provide customized 100 percent original papers.


24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.


Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.


Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 4/5

3076 Order Completed

99% Response Time

Emily Wei

Doctor of Philosophy (Ph.D) in Civil Engineering

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

184 Order Completed

96% Response Time

Arapera Billing

Masters in Management, MMgt

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2632 Order Completed

100% Response Time

Albert Ambrosio

MSc in Nursing

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 4/5

248 Order Completed

100% Response Time

Lloyd Bernabe

MSc in Accounting

London, United Kingdom

Hire Me

FREE Tools


Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.


Essay Typer

Get different kinds of essays typed in minutes with clicks.


GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.


Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.


Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability




Your Approx Earning

Live Review

Our Mission Client Satisfaction

Good work. it was on topic base, understandable and relevant. Help me to achieve great mark. Really appreciate.


User Id: 78040 - 08 Apr 2020


student rating student rating student rating student rating student rating

got assignment completed on time. I had lot of important information and up to the point.


User Id: 299002 - 08 Apr 2020


student rating student rating student rating student rating student rating

I was so excited to share my experience. I had Peter help me with assignment. He did and exceptional job that I couldn\'t believe it. I got an A+ PERFECT SCORE! ALL i can say is WOW! THANK YOU.


User Id: 307193 - 08 Apr 2020


student rating student rating student rating student rating student rating

Excellent work from the teacher. I got excellent marks and Assignment help had given the. assignment in the time.


User Id: 213317 - 08 Apr 2020


student rating student rating student rating student rating student rating
callback request mobile
Have any Query?