Under IFRS 16 Leases, lessors are required to account for lease receipts from operating leases as:
A) revenue, on a reducing balance basis over the lease term;
B) income, on inception date of the lease;
C) income, on a straight-line basis over the lease term;
D) revenue, at the end of the lease term.

Question

Quizplus · Accepted Answer

Under IFRS 16 Leases, lessors are required to account for lease receipts from operating leases as income on a straight-line basis over the lease term. This means that the lessor recognizes the lease income in equal amounts over the lease term, regardless of any lease payments received or due. This is in contrast to finance leases, where the lessor recognizes lease income on a reducing balance basis over the lease term.

Under IFRS 16 Leases, Lessors Are Required to Account for Lease