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What do you understand by Interest rate implicit on lease?
What do you understand by Interest rate implicit on lease?
As per AS 19-Lease, the discount rate is the interest rate implicit in the lease which represents the the aggregate present value of
- the minimum lease payments under a finance lease from the standpoint of the lessor; and
- any unguaranteed residual value accruing to the lessor, to be equal to the fair value of the leased asset.
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