- 12 Marks
CR – May 2024 – L3 – SB – Q4b – Leases (IFRS 16)
Memo on IFRS 16 changes and right-of-use assets treatment for Ododoeye PLC
Question
As the financial controller of Ododoeye PLC, an NGX-quoted company, you are preparing the financial statements for the year ended March 31, 2023. Chief Okechukwu, the finance director, has requested the following information about the treatment of the company’s leased assets in view of IFRS 16-Leases:
- Chief Okechukwu noticed a new component in the financial statements titled “right-of-use” relating to a leased warehouse. This component did not appear in previous years’ statements and has raised questions on its treatment under IFRS 16 compared to IAS 17.
Required:
Write an internal memo addressing Chief Okechukwu’s concerns and explaining:
- The key changes under IFRS 16 related to right-of-use assets.
- Accounting treatments for the right-of-use assets.
- Financial statement impact of right-of-use assets.
Find Related Questions by Tags, levels, etc.
- Tags: Corporate Reporting, Financial Statements, IFRS 16, Leases, NGX-Quoted Company, Right-of-Use Assets
- Level: Level 3
- Topic: Leases (IFRS 16)
- Series: MAY 2024
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