14. On 30 June 2018 Amin Ltd leased a vehicle to Fatima Ltd. The Fair Value of the vehicle at the inception of the lease was OMR 179,442. Lease establishment costs incurred by Amin Ltd totaled OMR 2,914. The lease agreement is for 4 years and the economic life of the vehicle is 6 years. The annual lease payments (payable in advance on 30 June each year) are OMR 47,800. This includes OMR 3,800, representing a reimbursement of insurance and maintenance costs paid by the lessor. The lease is cancellable, but will incur a penalty equal to 2 years lease payments. The Present Value of Minimum Lease Payment has been calculated to be OMR 170,914. The estimated residual value of the asset at the end of the lease term is OMR 30,000 and the guaranteed residual value is OMR 15,000. Fatima Ltd intends on returning the asset to Amin Ltd at the end of the lease term. The interest rate implicit in the lease is 7%. Required: Determine whether the lease is an operating or finance lease per - Is the lease non-cancellable? (1 mark) b. Is ownership to be transferred at end of the lease term? (1 mark) c. Does the term of the lease cover a major part of the asset's economic life? (2 marks) d. Does the PV of MLP represent substantially the FV of the asset? (2 marks) e. Does the lessee bear substantially all ownership risks and rewards? What are the exclusions for a lease under AASB 117