**Initial lease liability and ROU asset under AASB 16**

The lease liability is the present value of the five lease payments of $25,000 discounted at 7%:

\[
25000 \times \frac{1-(1.07)^{-5}}{0.07}
\]

\((1.07)^5 = 1.4025517307\), so \((1.07)^{-5} \approx 0.71298618\).

\(1 - 0.71298618 = 0.28701382\).

\(0.28701382 / 0.07 \approx 4.1001974\).

\(4.1001974 \times 25000 = 102504.935\), which rounds to **$102,504.94**.

With no initial direct costs, lease incentives, prepayments or restoration obligations, the ROU asset equals the initial lease liability: **$102,504.94**.

The measurement is governed by **AASB 16**.