Which one of the following statements regarding IFRS 16 leases is true? A lessor recognises a receivable in respect of a lease for an asset that is so specialised that only the lessee could use it without major modification Lessees apply the same accounting treatment to all leases without exception A lessor deducts initial direct costs incurred in arranging an operating lease from the carrying amount of the leased asset 256. Question ID: CMA 0691 P2 Q14 (Topic: Revenue Recognition) On September 1, 20X4, Beach Construction Company entered into a $10 million contract with City University to build a five-story parking garage. On that date, Beach's estimated total cost of constructing the building was $8 million. The estimated completion date for the garage was August 20X6. Beach's fiscal year ends May 31. Because Beach's performance creates an asset that City University controls as the work is being done, Beach accounts for the contract over time. Beach uses the cost-to-cost method to determine the percentage of the performance obligation in the contract that has been satisfied. Data regarding the contract are as follows. At May 31 (in thousands of dollars) 20X5 20X6 Actual costs incurred to date $2,000 $6,750 Estimated costs to complete 6,000 2,250 Progress billings to date 1,800 6,000 Cash collected to date 1,450 5,500 The current assets reported on Beach Construction Company's May 31, 20x6 statement of financial position as a result of this contract would be A. Accounts receivable of $6,000,000 and contract asset of $6,750,000. B. Accounts receivable of $500,000 and contract asset of $1,500,000. C. Accounts receivable of $6,000,000 and contract asset of $1,500,000 D. Accounts receivable of $500,000 and contract asset of $6,750,000