SCOPE Flashcards
Definition of a Lease
A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.
How to identify a lease?
Is a contract for the right to use an asset for a period of time in which:
- the asset is identified
- the lessee obtain substantially all the economic benefits
- the lessee have the right to direct use of the asset
What are the lease terms? When they begins?
The lease term begins at the commencement date
(the date on which the lessor makes the underlying
asset available for use by the lessee) and includes any rent free or reduced rent periods provided to the lessee by the lessor.
LEASE TERM:
- Non-cancellable period of the lease
- Extension options if reasonably certain to exercise
- Termination options if reasonably certain not to exercise