JAIIB | AFM | ACCOUNTING OF LEASE – CASE STUDY

Leasing is a principal aspect of corporate financing, allowing companies to utilize assets without incurring the costs of ownership. The accounting treatment of leases, therefore, plays an important role in financial reporting, influencing a company’s financial statements and key ratios. For banking professionals and JAIIB aspirants, a clear understanding of accounting of leases is significant to analyze clients’ financial health and assess their creditworthiness. Learning Sessions will take you through this article on the case study that delves into the accounting treatment of leases under the JAIIB Accounting and Financial Management (AFM) module, exploring the types of leases, accounting standards.

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Lease accounting regulates how lease agreements are recorded in a company’s financial statements. Proper lease accounting makes sure transparency and provides an accurate view of the company’s financial obligations and asset utilization. In recent years, lease accounting has evolved to reflect the International Financial Reporting Standards (IFRS) and Indian Accounting Standards (Ind AS). The JAIIB AFM module highlights understanding these principles, particularly their effects on financial statements, cash flow, and credit analysis.

For the extensive preparation of candidates, get details through our YouTube videos for JAIIB AFM Module wise Syllabus with explanations and tips to help candidates in their preparation journey.

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Types of Leases in Accounting:

1. Finance Lease (Capital Lease)
2. Operating Lease

In general it can be said that the accounting of leases has expanded to enhance financial transparency, emphasizing a true representation of a company’s financial position. Through the JAIIB AFM module, banking professionals gain crucial knowledge on the implications of lease accounting for balance sheets, income statements, and cash flows. This knowledge equips banking professionals to analyze lease structures accurately, enabling them to support clients in optimizing their financial reporting, maintaining healthy financial ratios, and achieving sustainable cash flow management. Learning Sessions provides additional information about JAIIB AFM PROCESS COSTING by giving examples of real life scenarios.

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