DSK SP $3 - what would it take?, page-28

rou asset is created for operating leases. they have the right to use the office building. however they also have the liability to pay rent which is the rou liability. at the start of the lease usually you recognise the rou asset and rou liability. the rou asset is depreciated straight line across the life of the lease and the lease liability reduces with payments whilst unwinding the amortisation schedule and recgonising the interest component. effectively there is no more rent expense there is depreciation. of the rou asset. so no fit out is not the rou asset. usually recgonise the fitout separately in normal ppe.