On a lease-by-lease basis multiply the remaining payments by the discount rate. 12 months 36 months 48 months 3 leases 320 months. Another potential pitfall is forgetting to document how you calculated the discount rate.
As lessees evaluate the appropriate discount rate to use this video helps to cover key factors to consider including 1 why the discount rate matters 2 how the definition of the incremental borrowing rate or IBR has changed 3 what can be used as collateral in determining the IBR and 4.
It also has a 500000 loan outstanding on which it pays an 8 interest rate. Determining a discount rate IFRS 16 sets out the discount rate requirement as follows. Similar process is used to determine weighted-average remaining lease term. Therefore if you are a lessee you should find out the unguaranteed residual value and the lessors initial direct cost.