Accounting Theory - Lessee Require the Exercise of Professional Judgement

Internal Code : TV553

Accounting Assignment :

QUESTION :  To what extent does the proposed initial measure of the lease liability by the lessee require the exercise of professional judgement, rather than verifiable measurement? Give reasons for your answer with reference to the specific components of the lease liability identified in paragraph 39 of the Exposure Draft. Explain how the need to exercise judgement in applying the proposals might reduce comparability of financial statements.