In this video, I discuss lessee disclosures for leases.
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Lessee disclosures encompass both qualitative and quantitative information related to their lease obligations and arrangements. Here's a breakdown of each:

Qualitative Disclosures:
Lessees must provide narrative information on various aspects of their leases, such as:

Nature of Leases: This includes descriptions of the leases, highlighting any specific terms, restrictions, or covenants that may impact the lessee's use of the leased asset or their financial obligations.
Variable Lease Payments: Lessees must explain how they calculate payments that can change, based on factors like usage or performance metrics.
Extension and Termination Options: If a lessee has the option to extend the lease term or terminate the lease early, they must disclose these options along with the related terms and conditions.
Residual Value Guarantees: Any guarantees provided by the lessee regarding the residual value of the leased asset must be disclosed, along with their terms and conditions.
Future Leases: Information on any leases that have not yet started but will impose significant rights or obligations on the lessee.
Significant Assumptions and Judgments: Lessees should disclose the key assumptions and judgments made in their accounting for leases, such as how they determine whether a contract is or contains a lease, how they allocate consideration between lease and non-lease components, how they determine the discount rate, etc.
Sale-Leaseback Arrangements: If the lessee has sold an asset and then leased it back, the terms and conditions of this arrangement must be disclosed.
Accounting Policies: Lessees should disclose their accounting policies for leases, including their treatment of short-term leases and any practical expedients they use.
Quantitative Disclosures:
These disclosures involve numerical information related to the leases, including:

Finance Lease Costs: These are broken down into the amortization of the right-of-use (ROU) assets and the interest on lease liabilities.
Operating Lease Costs: The total cost of operating leases.
Short-Term Lease Costs: Costs associated with leases that have a term of 12 months or less.
Variable Lease Costs: Costs that vary based on factors outlined in the lease agreement.
Cash Payments: Total cash outflows for leases, separated into operating and financing cash flows.
Noncash Information: Supplemental information on lease liabilities arising from obtaining ROU assets, which involves noncash transactions.
Weighted Average Terms: Disclosure of the weighted average remaining lease term and the weighted average discount rate used in measuring lease liabilities.
Maturity Analyses: A breakdown of when lease liabilities are due, separated into operating and finance leases, typically provided for the next five years.
In summary, lessees must provide detailed disclosures that give a comprehensive view of their lease obligations, including the terms and conditions of their leases, the financial impact of these leases, and significant judgments made in accounting for these leases.



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