Accounting

Accounting For Initial Direct Costs (IDC) in Leases

Accounting For Initial Direct Costs (IDC) in Leases : Initial direct costs (IDC) are incremental costs that are directly attributable to negotiating and arranging a lease, except for such costs incurred by manufacturer or dealer lessors. Examples include commission and legal fees,credit investigation, document preparation and other internal costs, but exclude general overheads such as those incurred by a sales and marketing team.

Initial direct cost incurred by a manufacturer/dealer lessor are excluded from the definition of initial direct costs because, according to paragraph 46, the costs of negotiating and arranging a finance lease are ‘mainly related to earning the manufacturer’s or dealer’s selling profit’. How the IASB reached this conclusion is hard to understand. Thus, for the purposes of determining the interest rate implicit in the lease, any initial direct costs incurred by a lessee or a manufacturer/dealer lessor are ignored. Here is the table prepared for your easy understanding.

Initial Direct Cost in Lessee’s Books of Accounts:

Operating Lease: expended out  the costs as incurred

Capital Lease : expended out  the costs as incurred

Initial Direct Cost in Lessor’s Books of Accounts:

Operating Lease: Amortize the IDC Straight line over the lease term

Sales Type Lease : Add the IDC to Cost of Goods Sold/expend out  in the year the sale is recorded

Direct Financing Lease : Add the IDC to net investment in the Lease

Summary: In case of lessee, all Initial Direct Costs (IDC) are expended out as incurred irrespective of Operating or Capital lease. In case of lessor, all Initial Direct Costs (IDC) are added to COGS if the lease is Sales Type Lease but deferred when the lease is a Direct Financing Lease and amortized over the lease term. If the lease is an operating lease for the lessor, the amortize the IDC Straight line over the lease term. So, no matter for Lessee, all the time it shows Initial Direct Costs as Expenses.

Related Articles

Back to top button

akun pro kamboja

slot thailand

spaceman

mahjong ways

slot pulsa

https://hoerakinderschoenen.nl/

https://bergeijk-centraal.nl/wp-includes/slot-deposit-gopay/

slot mahjong ways

https://www.job-source.fr/wp-content/slot-singapore/

https://tentangkitacokelat.com/wp-includes/slot-deposit-gopay/

slot server thailand

akun pro myanmar

slot garansi kekalahan

slot deposit dana

https://slot-myanmar.deparmotor.com/

https://slotserverluarnegeri.deparmotor.com/

https://slot777.devtmp.focim.edu.mx/

https://bet-200.devtmp.focim.edu.mx/

https://slot-thailand.devtmp.focim.edu.mx/

IDN Poker

Slot Server Thailand

https://buggybrolly.com/wp-includes/idn-poker/

https://www.donchuystacoshoputah.com/

https://orderzenseafoodsushigrill.com/

https://www.saltedsalad.com/

https://tastebakerycafe.com/

https://www.order369ramenpokechinesefood.com/

https://www.suiviesante.fr/wp-content/slot-malaysia/

https://www.smokepitgrill.com/

https://www.ilovesushiindy.com/

https://yakikojapanesegrill.com/

https://www.themixxgrill.com/

https://chilangosbargrill.com/

https://tentangkitacokelat.com/wp-content/slot-pulsa/

https://winkelstueck-reparatur.de/wp-includes/slot-pulsa/

https://slot-pulsa.devtmp.focim.edu.mx/

https://kayanscarf.com/

https://www.garage-aymard.fr/wp-includes/slot-qris/

https://nexttech-tt.com/

https://dotnetinstitute.co.in/wp-includes/slot-deposit-gopay/

https://www.yg-moto.com/wp-includes/sbobet/

https://bergeijk-centraal.nl/wp-content/slot777/

https://www.anticaukuleleria.com/slot-myanmar/

https://bergeijk-centraal.nl/wp-includes/slot-bonus-new-member/

https://houseofgabriel.com/wp-includes/slot-bonus/

sbobet

slot777

jurassic kingdom

sbobet

https://houseofgabriel.com/wp-includes/pomo/slot-petir-merah/

https://houseofgabriel.com/wp-includes/pomo/slot-garansi-kekalahan-100/

https://lajme.org/wp-content/sbobet/

https://houseofgabriel.com/wp-includes/pomo/slot777/

https://houseofgabriel.com/wp-includes/pomo/mahjong-ways/

https://houseofgabriel.com/wp-includes/pomo/bca-slot/

https://houseofgabriel.com/

https://www.job-source.fr/wp-content/sugar-rush/

https://repairkaro.com/pragmatic-play/

rtp slot

slot server thailand

pragmatic play

slot pulsa

slot bonus

slot dana

rtp slot

slot pulsa

https://idn-poker.zapatapremium.com.br/

https://sbobet.albedonekretnine.hr/

https://mahjong-ways.zapatapremium.com.br/

https://slot777.zapatapremium.com.br/

https://baksobakarmantap.com/slot777/

https://www.entrealgodones.es/wp-includes/slot-pulsa/

https://slot88.zapatapremium.com.br/

https://slot-pulsa.zapatapremium.com.br/

https://hollyorchards.com/wp-content/pyramid-bonanza/

https://slot777.jikuangola.org/

https://slot777.nwbc.com.au/

http://wp.aicallcenter.ai/wp-includes/widgets/slot-deposit-pulsa/

https://choviettrantran.com/wp-includes/slot-deposit-pulsa/

https://kreativszepsegszalon.hu/wp-includes/slot-deposit-pulsa/

https://www.muaythaionline.org/wp-includes/slot-deposit-pulsa/

https://pgdownloads.enterprisedb.com/slot-deposit-pulsa/

https://lajme.org/wp-content/sbobet/

https://ebook.franchise.7-eleven.com/slot-pulsa/

https://llohan.hollywood.com/slot-pulsa/

https://transition.site5.com/slot-pulsa/

https://fan.iitb.ac.in/slot-pulsa/

Sbobet88

slot server thailand

https://hoerakinderschoenen.nl/

slot777

slot bonus

slot server myanmar

idn poker

https://podcast.peugeot.fr/slot-pulsa/

https://mahjong-ways.softcia.com.br/

https://le-fief-fleuri.fr/core/wp-includes/sbobet/

https://le-fief-fleuri.fr/core/wp-includes/idn-poker/

slot bonus

idn poker

sbobet88

slot gacor

sbobet88

slot bonus

sbobet88

slot myanmar

slot thailand

slot kamboja

slot bonus new member

sbobet88

bonus new member

slot bonus

https://ratlscontracting.com/wp-includes/sweet-bonanza/

https://quickdaan.com/wp-includes/slot-thailand/

https://summervoyages.com/wp-includes/slot-thailand/

Joker123

sbobet88

https://aws-klinkier.pl/wp-content/idn-poker/

joker123

https://thewolfiscoming.com/wp-includes/slot-bonus/

sbobet88

https://www.handwerksform.de/wp-includes/slot777/

https://www.nikeartfoundation.com/wp-includes/slot-deposit-pulsa/

https://lepremier.miami/wp-content/slot-bonus/

https://www.anticaukuleleria.com/wp-content/cmd368/

https://candyhush.com/wp-content/slot-bonus/

https://showersealed.com.au/wp-content/sabasport/

https://tdapelsin.ru/wp-includes/slot-bonus/

https://kreativszepsegszalon.hu/wp-content/slot-bonus/

sbobet88

https://jakartaaids.org/wp-content/sbobet88/

https://ratlscontracting.com/wp-includes/ubobet/

situs slot nexus

situs slot nexus

situs slot nexus

slot bet kecil

slot bet kecil

slot gacor deposit 10 ribu

slot gacor deposit 10 ribu

bonus new member

rtp slot

slot joker123

slot bet 100

slot thailand

slot kamboja

sbobet

slot kamboja

nexus slot

slot deposit 10 ribu

slot777

sbobet

big bass crash slot

big bass crash slot

big bass crash slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

spaceman slot

wishdom of athena

spaceman

spaceman

slot bonanza

slot bonanza

slot spaceman

slot spaceman

Rujak Bonanza

Candy Village

Gates of Gatotkaca

Sugar Rush

Rujak Bonanza

Candy Village

Gates of Gatotkaca

Sugar Rush

Adblock Detected

Please consider supporting us by disabling your ad blocker