Feature Currency Lease For Free

A currency call option is a financial derivative instrument that gives the holder (buyer) the right ?but not the obligation ? to buy the contracted currency at a set price or exchange rate (the 'strike price'), on a predetermined expiration date.

Characteristics of a finance lease: The customer chooses the assets i.e a new machine. The finance company purchases the asset. The customer makes monthly lease payments for use of the leased asset. The leasing company covers the cost of the asset plus interest.

Currency options are derivative contracts that grant the holder the right, but not the obligation, to buy (call option) or sell (put option) a specific amount of one currency for another currency at a predetermined exchange rate (strike price) within a specified period.

A lease will be recorded on the balance sheet as a right-of-use (ROU) asset and lease liability. The lease liability is the payment obligation over the term of the lease contract, while the ROU asset represents the control of the asset under the lease contract.

A currency option is a contract that will give the buyer the right, but not the responsibility, to buy or sell a specific currency at a predetermined exchange rate on or before a set date.

Application to lease accounting Since a lessee's lease liability is a monetary item, the liability is translated using a current exchange rate at the end of each reporting period and foreign exchange differences are recognised in profit or loss.

Currency futures are futures contracts for currencies that specify the price of exchanging one currency for another at a future date. The rate for currency futures contracts is derived from spot rates of the currency pair. Currency futures are used to hedge the risk of receiving payments in a foreign currency.