Distribution warehouse, Tempe Sample
Real estate, leased from Salt River Logistics REIT, Tempe. Commenced Jul 1, 2024, ends Jul 1, 2034.
- Term
- 120 months, paid in arrears
- Discount rate
- 6.50%
- Liability at commencement
- 1,087,128.20
- ROU at commencement
- 1,066,328.20
- Straight-line cost
- 12,502.12 per period
- Transfer of ownershipNot metOwnership of the asset transfers to the lessee by the end of the term.
- Purchase option reasonably certainNot metA purchase option the lessee is reasonably certain to exercise.
- Major part of remaining economic lifeNot met, 20.00%Lease term ÷ remaining economic life, compared with the policy threshold.
- Substantially all of fair valueNot met, 24.16%Present value of lease payments (including any probable residual value guarantee) ÷ fair value, compared with the policy threshold.
- Specialized assetNot metThe asset has no alternative use to the lessor at the end of the term.
Conclusion: operating lease. Not eligible for the short-term election.
Initial measurement
| Present value of lease payments (lease liability) | 1,087,128.20 |
| Plus: prepaid rent | – |
| Plus: initial direct costs | 4,200.00 |
| Less: incentives received | (25,000.00) |
| ROU asset | 1,066,328.20 |