BLM52010 - Right-of-use assets: right-of-use asset lessees: the spreading rules: the basic calculation
Where the change of basis provisions treat听any receipt, expense, adjustment income or adjustment expense as arising in consequence of the recognition of a right听of听use asset resulting from the adoption of an accounting standard, any such amount is to be treated as arising over a period (鈥渢he spreading period鈥�) determined by the lessee in accordance with five steps
calculate the net debits and credits brought into account for each lease.听
calculate a percentage for each lease (鈥渢he relevant percentage鈥�) by dividing the Step 1 amount for each lease by the total amounts for the lessee for all leases to which Step 1 applies (treating each Step 1 amount as a positive amount) and multiplying by 100.听
multiply the relevant percentage found under Step 2 by the remaining period outstanding, in days, of the lease as at the date of transition (the term of the lease is determined听in accordance with听GAAP).听
add together all听the amounts calculated under Step 3. This will result in the weighted mean of remaining periods of the leases affected by the听transitional adjustments.听
the spreading period is the number of days found under Step 4 beginning with the day on which the first period of account begins.听
Leases are considered individually, but portfolios of leases having similar characteristics may be considered as a group if that is the treatment adopted under GAAP.听
An example of a spreading calculation can be found at鈥�BLM52015.听