Australia Finance Sub-leases

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Jul 22, 2018
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IFRS 16 introduces the concept of a finance sub-lease; where the right of use lease asset gets derecognised, and replaced with a finance sub-lease receivable.

My query is, what does one do where you sub-lease out part of an asset; and retain a portion of the asset for yourself; and the sub-lease is still classified as a finance sub-lease, how would you know how much of the right of use asset to retain and continue amortising.

My guess is you compare the NPV's of the finance sub-lease against the asset value, and the difference continues to be amortised. But it can get tricky when the rents for the head lease and sub-lease differ.

Any thoughts or suggestions.
 

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