CAF-6 · Chapter 3 · Question 5 of 15
A company leases a high-end laptop for 10 months at a cost of Rs. 8,000 per month. There is no purchase option. How can the company choose to account for this under IFRS 16?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Can elect to recognize lease payments as an expense on a straight-line basis.
Explanation
Lessees can choose to apply a recognition exemption for short-term leases, which are leases with a term of 12 months or less and no purchase option. In such cases, payments are recognized as an expense over the lease term.
More IFRS 16 Leases MCQs
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