On January 1, Year 1, Autonomous Systems Ltd. (ASL) signed a contract to lease computer equipment from Lenovo for three

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On January 1 Year 1 Autonomous Systems Ltd Asl Signed A Contract To Lease Computer Equipment From Lenovo For Three 1 (21.96 KiB) Viewed 41 times

On January 1, Year 1, Autonomous Systems Ltd. (ASL) signed a contract to lease computer equipment from Lenovo for three years. The lease agreement requires ASL to pay $30,000 at the end of each year of the lease. The company's borrowing rate is 6%. Under U.S. GAAP, the lease would be classified as operating. However, ASL is based in Singapore and will account for the lease using IFRS Required: 1. Determine the value of the lease liability recorded by ASL on January 1, Year 1. 2. Calculate ASL's depreciation expense related to the leased asset for Year 1. 3. Calculate ASL's interest expense related to the lease liability for Year 1. 4. How much higher (or lower) are ASL's expenses related to this lease in Year 1 as accounted for under IFRS compared to how much expense would be recorded related to this lease in Year 1 under U.S. GAAP? Use parentheses to denote that IFRS expenses are a lower amount, if needed.