IDENTIFICATION OF LEASES For the following arrangements, discuss whether they are lease transactions, and thus fall under
Question:
IDENTIFICATION OF LEASES For the following arrangements, discuss whether they are lease transactions, and thus fall under the ambit of AASB 16/IFRS 16. 1. Entity A enters into a contract with Entity B, whereby Entity B will provide 5 SUV vehicles for Entity A to use over the next 3 years. The vehicles have been selected by Entity A from a large pool of similar vehicles and are explicitly identified in the contract. Entity B is only allowed to substitute the vehicles if, and only for the period when, the vehicles are being repaired. 2. Entity C enters into a contract with Entity D, whereby Entity D will provide 2 aeroplanes for Entity C to use over the next 5 years. The aeroplanes have been selected by Entity C from a large pool of similar aircraft, but remain in the airport hangar owned by Entity D when not in use and can be substituted at any time by Entity C. 3. Entity E enters into a contract with Entity F, a shopping centre operator, whereby Entity E will be offered a space for a pop‐up shop in one of the centres managed by Entity F. The contract specifies the size of the space to be provided, not the actual location.
Step by Step Answer:
Financial Reporting
ISBN: 978-0730363361
2nd Edition
Authors: Janice Loftus ,Ken Leo ,Sorin Daniliuc ,Belinda Luke ,Hong Nee Ang ,Karyn Byrnes