Financial Statements: Lease Liability- Accounting Theory Report Writing Assignment

Task:

Format: Excluding parts where you are asked for journal entries (if applicable), your response(s) should be structured as a short-answer style response. For guidance on writing e short-answer style responses, please refer to section 1.1 of the Communication Skills

Guide. (See ‘Web Links’ module on MyUni.)

Responses must be typed and double-spaced.
The use of other authors’ material in your assignment MUST be properly acknowledged and referenced using the Harvard system.

Assessment: Your assignment mark will reflect how well you answer the question, drawing on the Exposure Draft and other pronouncements, such as accounting standards and the conceptual framework and other sources, as applicable. Remember to use quotation marks if directly quoting from other sources: 15% of the maximum mark will be awarded for structure, writing style and referencing.

Required
1. Prepare an answer, in short answer-style form, to the question assigned to you. The question should be answered with reference to the IASB Exposure Draft ED/2013/6 Leases, issued in 2013.
http://archive.ifrs.org/Current-Projects/IASB- Projects/Leases/Exposure-Draft- May-2013/Documents/ED-Leases- Standard-May- 2013.pdf

2. Submit the final version of your essay in the correct assignment box on MyUni. All references to the Exposure Draft refer to the IASB Exposure Draft ED/2013/6 Leases, issued in 2013.

QUESTION:
To what extent does the proposed initial measure of the lease liability by the lessee require the exercise of professional judgement, rather than verifiable measurement? Give reasons for your answer with reference to the specific components of the lease liability identified in paragraph 39 of the Exposure Draft. Explain how the need to exercise judgement in applying the proposals might reduce comparability of financial statements.