1 This Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions. This information gives a basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of an entity.
2 An entity shall consider the terms and conditions of contracts and … Continue reading
9 At inception of a contract, an entity shall assess whether the contract is, or contains, a identified asset for a period of time in exchange for consideration. Paragraphs B9–B31 set out guidance on the assessment of whether a contract is, or contains, a lease.
10 A period of time … Continue reading
22 At the commencement date, a lessee shall recognise a right-of-use asset and a lease liability.
Initial measurement of the right-of-use asset
23 At the commencement date, a lessee shall measure the right-of-use asset at cost.
24 The cost of the right-of-use asset shall comprise:
- the amount of the initial measurement of the lease liability, as described in paragraph 26;
- any lease payments made at or before the commencement date, less any lease incentives received;
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Classification of leases
Application Guidance in Appenbdix B, paragraphs B53–B58
61 A lessor shall classify each of its leases as either an operating lease or a finance lease.
62 A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset.
63 … Continue reading
98 If an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) and leases that asset back from the buyer-lessor, both the seller-lessee and the buyer-lessor shall account for the transfer contract and the lease applying paragraphs 99–103.
Assessing whether the transfer of the asset is a sale
99 An entity shall apply the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as … Continue reading
This appendix is an integral part of the Standard. It describes the application of paragraphs 1–103 and has the same authority as the other parts of the Standard.
B1 This Standard specifies the accounting for an individual lease. However, as a practical expedient, an entity may apply this Standard to a portfolio of leases with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this Standard to the portfolio would not differ … Continue reading
Recognition exemption: leases for which the underlying asset is of low value
Application Guidance to paragraphs 5 – 8
B3 Except as specified in paragraph B7, this Standard permits a lessee to apply paragraph 6 to account for leases for which the underlying asset is of low value. A lessee shall assess the value of an underlying asset based on the value of the asset when it is new, regardless of the age of the asset being leased.
B4 The … Continue reading
Application Guidance to paragraphs 9 – 11
B9 To assess whether a contract conveys the right to control the use of an identified asset (see paragraphs B13–B20) for a period of time, an entity shall assess whether, throughout the period of use, the customer has both of the following:
- the right to obtain substantially all of the economic benefits from use of the identified asset (as described in paragraphs B21–B23); and
- the right to direct the use of the
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Application Guidance to paragraphs 12 -17
B32 The right to use an underlying asset is a separate
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