Compute the fair value of the lease for some reason

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We have entered into a number of lease contracts in October 2011 in relation to motor vehicles, and have decided to expense the lease expense when we make the payment. John the financial controller of our firm suggests that we should capitalise the motor vehicles and depreciate them, but the directors think that expensing the lease payments will reflect the expense in the correct year. John also wants us to calculate the “fair value” of the lease for some reason, but I think that would be a waste of time as we already know that the lease payment each month totals $ 25,000 and we have a three year lease on all the assets.

Reference no: EM13131422

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