IFRS Notes

IAS 17: Keywords

Finance lease
In a finance lease,
lessor transfers substantially all risks and rewards of ownership.

Operating lease
If a lease is not a finance lease,
it is an operating lease.

Inception of the lease
(1) Date of lease agreement
(2) If principal provisions are committed at an earlier date,
the commitment date

Commencement of the lease term
The first day when lessee is entitled to (3)
(3) the right to use the leased asset

Lease is classified at
the inception of the lease.

Lease is recognised at
the commencement of the lease term.

At the inception of the lease, lease is agreed.
At the commencement of lease term, lessee starts using the asset.