IFRS 16 – Leases – Theory – 3

Which types of lease are covered in IFRS 16?

Which of the following situations will less likely lead to a lease being classified as a finance lease?

Lease classification is made at the inception date and is reassessed only if there is a lease modification.

Which of the following may give rise to a new classification of a lease for accounting purposes?

At the commencement date, a lessee shall recognise assets held under a finance lease in its statement of financial position and present them as a receivable at an amount equal to the net investment in the lease.

Which of the following statements is true?

A manufacturer or dealer lessor does not recognise any selling profit on entering into an operating lease because it is not the equivalent of a sale.

Which of the following does define unearned finance income?

Which of the following are examples of future events that, at inception of the contract, would not be considered likely to occur and, thus, should be excluded from the evaluation?

A lessee has made an accounting policy election not to recognise a right-of-use asset and a lease liability that arise from short-term leases for any class of underlying asset. The lessee enters into a 12-month lease of a vehicle, with an option to extend for another 12 months. The lessee does not have a significant economic incentive to exercise the option to extend. Which of the following statements is not true?