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this is a lecture from open tuition to benefit from the lecture you should download the free lecture notes from open tuition comm right lets go through and work the examples together you may have decided to try and work it yourself if you are brave or thats thats your choice lets go through here and have a look and show how the lease will be accounted for in the financial statements so the usual position statements performance statements over the five-year period okay so it says here on the first of January 2015 plum entered into a five year lease of machinery so weve got a lease and leases are brought on to the financial statements we need to go through there and recognize a right of use asset and a lease liability theres no low value exemption here or short life exemption it says here it has a useful life of six years the rental payments are five thousand dollars per annum first payment that is made on the first of January 2015 okay so thats the same date as when we enter int