a (QUESTION FOUR (20 MARKS) ‘A: In January 2016 the International accounting Standards Board (IASB) released IFRS 16 Leases, which supersedes IAS 17, Leases. IFRS 16 eliminates the classification of lease as either operating leases ot finance leases, and introduces a single lessee accounting model. The effective date of the new IFRS 16 i 1* January 2019. R i. \Why was it necessary for IASB to change the previous lease standard [AS 17 i pac een were toTFRS16 leases (@marks) RES Decree rie fi, Discuss what has changed in the new lease, IFRS 16 in comparison to the previous IAS 17 - lease standard. (6 marks) B. On 1 july 2016 Majanibora Company entered into an agreement to lease a machine that had an estimated life of four years The lease period is also four years at which point the asset will be returned to the lesing company. Majanibora Company is required to pay forall maintenance and insurance costs relating to the asset. Annual ental of TZS 10,000,000 are payable from July 2016, The machine is expected to have anil residual value at the end of it life. The machine had a fair value of T25 Scanned with CamScannerYN me WG \h ease “ate b. atk) HTT SHULL dy Wane what tes dha yoni page satan ona yO wy owas rao saurediow fon A rate sets vis hi yi ae yah Tre matine’s a been’ cemaoenornine™> sya va et : nate a Teles jane at = om < : fect a in “2 sei . oo ttt ; 3) sate we as A one Scanner xd with Ce ‘amScanni erScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScannerScanned with CamScanner4 Pirate Pe HISD) Lead ot JV! cawedd (Wit Cawerd tabs, Scanned with CamScanner5 5 g 5 é 5 zg 5 aGh. 2 heal es ee tach a ea Prante aie Pra (eo XO. ? Ratt = Scanned with CamScannerBok. © beaker © Pas! sare erscash Pv> gor ase. Dirvel costs aoeco - W. Risht-tpusecessap: PU40/002 Poe & po2as2-£20/002 = #a20sz 651224 -06 (coo | ST FHIESCF Finance coo) ~ 49416 5:06» 2 Be ico. cages SR. 7 z(ase3- Current me liaely = $4878 2B Loe the yaar a role. Scanned with CamScanner