CERTYNEX IFRS ACADEMY

The GrandPort group, with several thousand employees, and the young company Pixelia, with 3 employees, each lease a new laptop of the same model for three years. GrandPort treats its lease as relating to a low-value asset, and this analysis of the asset is considered correct. Pixelia's finance director considers that, for such a small entity, the lease payment is material and that the laptop therefore cannot be a low-value asset for Pixelia. Which conclusion should be adopted?

Pixelia is right: a lease that is material to the lessee cannot relate to a low-value asset.

The assessment is absolute: the same asset leads to the same conclusion for both lessees, and Pixelia may apply the exemption.

Each lessee sets its own low-value threshold according to its size; the two conclusions can coexist.

Pixelia must apply the exemption, because it is mandatory once the asset is of low value.