Interpretation 4 Determining Whether an Arrangement Contains a Lease provides that the following arrangements which are not in the legal form of a lease may in fact fall within the definition of a lease for accounting purposes,except for:
A)outsourcing arrangements.
B)non-cancellable service agreements.
C)service concession arrangements.
D)take-or-pay contracts.

Question

Quizplus · Accepted Answer

Non-cancellable service agreements do not meet the definition of a lease because they do not convey the right to control the underlying asset. The other options listed may contain elements of a lease arrangement and therefore require analysis under the lease accounting standard.

Interpretation 4 Determining Whether an Arrangement Contains a Lease Provides