Practice Test GeeksIFRS for SMEs (IFRS for Small and Medium-sized Entities (SMEs)) Practice Test
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IFRS for SMEs Leases and Service Concessions Flashcards

6 cards from real IFRS for SMEs) practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Under IFRS for SMEs, a finance lease is one that:

    Answer: Transfers substantially all the risks and rewards incidental to ownership of the leased asset to the lessee

    IFRS for SMEs defines a finance lease as a lease that transfers substantially all risks and rewards of ownership to the lessee, regardless of legal title.

  2. Under IFRS for SMEs, at the commencement of a finance lease, the lessee recognizes:

    Answer: An asset and a liability at the lower of the fair value of the leased asset and the present value of minimum lease payments

    At commencement, the lessee recognizes an asset and a corresponding lease liability at the lower of the fair value of the leased asset and the present value of minimum lease payments.

  3. Under IFRS for SMEs, how does a lessee account for an operating lease?

    Answer: Lease payments are recognized as an expense on a straight-line basis over the lease term

    Under IFRS for SMEs, operating lease payments are recognized as an expense in profit or loss on a straight-line basis over the lease term.

  4. Which of the following is an indicator of a finance lease under IFRS for SMEs?

    Answer: The lease term is for the major part of the economic life of the asset

    A lease term covering the major part of an asset's economic life is one of the indicators that a lease is a finance lease under IFRS for SMEs.

  5. Under IFRS for SMEs, how does a lessor classify leases?

    Answer: As either finance leases or operating leases based on whether substantially all risks and rewards are transferred

    Under IFRS for SMEs, a lessor classifies each lease as either a finance lease or an operating lease based on the same risks-and-rewards principle as for lessees.

  6. Under IFRS for SMEs, a lessor with a finance lease recognizes the lease as:

    Answer: A receivable at an amount equal to the net investment in the lease

    A finance lessor derecognizes the leased asset and recognizes a receivable equal to the net investment in the lease (present value of minimum lease payments plus unguaranteed residual value).

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