FA2

Lease A Lease is an agreement whereby the lessor conveys in return for a

payment or series of payments the right to use an asset for an agreed period of time

Finance Lease A finance lease is a lease that transfers substantially all risks and rewards

incidental to ownership of an asset

Operating Lease A lease other than a finance lease

Hire Purchase Contract A contract for the hire of an asset which contains a provision giving the

hirer an option to acquire legal title to the asset upon the fulfillment of certain conditions stated in the contract

Liability A liability is a present obligation of the entity arising from past event, the

settlement of which is expected to result in a outflow from the entity of resources embodying economic benefit

Provision A liability of unknown amount or timing

Contingent Liability A possible obligation that arises from past events and whose existence

will be confirmed only by the occurrence of one or more uncertain future events not wholly confirmed within the entity’s control; or

A present obligation that arises from past events but is not recognized because: i) it is not probable that a transfer of economic benefits will be required to settle the obligation; or ii) the amount of the obligation cannot be measured with sufficient reliability

Contingent Asset A possible asset that arises from past events and whose existence will be

confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control

Liability Obligations of an entity to transfer economic benefits as a result of past

transactions or events

Legal Obligation An Obligation that derives from… A contract Legislation, or

Other operation of law