Bramley Advisory leases 15 laptops on 1 March 2025 for two years, paying $9,600 for the year in cash on that date.
- Each laptop is worth around $1,200 when new.
- The company elects the low-value asset exemption available under IFRS 16.
Required: Prepare the journal entry for the payment on 1 March 2025.
The exemption is judged on the value of the asset when new — in absolute terms — not on how material the lease is to the company. Where it applies, no right-of-use asset or lease liability is recognised.