Joyce Ltd (Joyce) needs an equipment to increase production capacity. Given that the price of the equipment is high and the amount of their cash holdings was not adequate, Joyce decided to enter into a lease contract on 1 July 2019 with Wei Ltd (Wei) for the equipment which was agreed to be used for production in the following 5 years. There is no restriction of use and no particular term in the contract to limit the use of the equipment. Rents will be paid at the end of each year. Neither residual value nor initial direct cost exists. The total amounts that Joyce needs to pay to rentthe equipment is $100, 000, which was estimated by taking into account the time value of the money and related uncertainties.

Required: Explain why an asset should be recognised by Joyce at commencement date of the lease contract? Your justification should be based on the concepts stated in the new revised conceptual framework instead of AASB 16 Leases. (Note: no justification needed for lease payable)