Nhyiraba Limited lease a building worth R4 million to Quintin Limited under an operating lease for 10 years. During the period, Quintin Limited decided to buy the building at the end of the lease period of which no proper documentation and agreement were reached between the two companies. Identify how Nhyiraba Limited will recognize the building under IAS 40 and give reasons for your answer
Nhyiraba Limited lease a building worth R4 million to Quintin Limited under an operating lease for 10 years. During the period, Quintin Limited decided to buy the building at the end of the lease period of which no proper documentation and agreement were reached between the two companies. Identify how Nhyiraba Limited will recognize the building under IAS 40 and give reasons for your answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.1.Nhyiraba Limited lease a building worth R4 million to Quintin Limited under an operating
lease for 10 years. During the period, Quintin Limited decided to buy the building at the
end of the lease period of which no proper documentation and agreement were reached
between the two companies. Identify how Nhyiraba Limited will recognize the building
under IAS 40 and give reasons for your answer.
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