Under IAS 17 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 IAS 17, 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 amount received from the lessee is recognized as revenue evenly over the term of the lease. This is because the lessor is deemed to be providing the use of the leased asset over the term of the lease and therefore earning revenue over that period.

Under IAS 17 Leases, Lessors Are Required to Account for Lease