When is a lease recognized as an operating lease under IFRS?
A) if it is deemed so by the lessor
B) if it is less than one year
C) if it doesn't meet the criteria of an operating lease
D) if the company elects to record as an operating lease

Question

Quizplus · Accepted Answer

Under IFRS, a lease is recognized as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership to the lessee. Short-term leases (less than one year) can also be classified as operating leases if the lessee chooses not to apply the recognition requirements to such leases.

When Is a Lease Recognized as an Operating Lease Under