The objective of this standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosures to apply in relation to finance and operating leases.
IAS 17, Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.
A finance lease is a lease that transfers substantially all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. All other leases are operating leases. Operating leases do not transfer substantially all the risks and rewards incident to ownership of an asset.
Minimum lease payments are the payments over the lease term that the lessee is, or can be, required to make, excluding contingent rent, costs for services and, where appropriate, taxes to be paid by and reimbursed to the lessor, together with:
However, if the lessee has an option to purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date ...