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FRS 102 and operating lease disclosure

Correct disclosure in notes to the accounts

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I am hoping that somebody could help with the correct disclosures with a few queries on non-cancellable operating leases. These are all examples that I could do with some clarity on:

A) A company signs up to sublet an office space for 10 years. The lease agreement shows that their mid-landlord (the original tenant) has the option to break after 5 years but the sub-tenant has no option to break. Does this make this 'non-cancellable' and therefore the full 10 year rents should be shown in the notes or does the fact that their mid-landlord has the option to break mean only 5 year rents should be disclosed?

B) A company has a year end of 30 June 2018 and the quarter's rent for 28 June - 27 Sept was paid on 28 June.  Ignoring the few days the rent is posted as a prepayment.  The lease expires on 29 June 2019.  Should the rent shown as due 'not later than one year' reflect the actual payments due i.e. 3 more quarter payments or should it reflect the fact that there is, in effect, another year due?

C) A company has a year end of 30 June 2018. The lease expires on 30 September 2018 but a renewal for another 5 years to 30 September 2023 is agreed on 1 September 2018.  The accounts to 30 June 2018 are still to be finalised.  Should the amount due 'not later than one year' be shown as the 3 months left (as at Balance Sheet date) and a note to reflect the lease renewal in post balance sheet events? 

I would be grateful for any advice on this.

Thanks.

 

 

 

 

 

 

 

 

 

 

 

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15th Feb 2019 15:45

A) Full ten years - your lease has no break clause
B) Full year due as < 1 year
C) 3 months remaining as < 1 year

Thanks (1)
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