Which of the following is not one of the situations provided in AASB 117 in relation to the classification of leases as finance leases?
A)Losses from the fluctuation of the fair value of the residual accrue to the lessee
B)Leased assets are of a specialised nature
C)The lessee has provided a guarantee that they will acquire the asset at the end of the lease term
D)The lease is for a major part of the economic life of the asset.

Question

Quizplus · Accepted Answer

AASB 117 provides four situations that indicate a lease should be classified as a finance lease. These are: (1) the lease transfers ownership of the asset to the lessee at the end of the lease term, (2) the lease grants the lessee the option to purchase the asset at a bargain price, (3) the lease term covers a major part of the economic life of the asset, (4) the present value of the lease payments plus any guaranteed residual value is substantially all of the fair value of the asset. Losses from the fluctuation of the fair value of the residual accruing to the lessee and the leased assets being of a specialized nature are not situations provided in AASB 117.

Which of the Following Is Not One of the Situations