CERTYNEX IFRS ACADEMY

Brislane rents out vehicles short term and then sells them after two years in the ordinary course of business (IAS 16 para. 68A, context data). How should the payment to buy the vehicles be classified?

As operating activities, as are the rentals and the resale proceeds.

As investing activities, since the vehicles are first recognised as property, plant and equipment.

As financing activities, the vehicles being rented to third parties.

Outside the statement, as it is merely a transfer to inventories.