CERTYNEX IFRS ACADEMY

Rivéo leases, for two years, a nine-year-old car whose current value is estimated at 2,500. An equivalent model is worth 28,000 when new. The contract contains no purchase option. The accountant proposes applying the low-value exemption. Which analysis is correct?

The exemption does not apply: low value is assessed when new, and a car is typically not of low value when new.

The exemption applies, because the current value of the car is low.

The exemption applies, because the lease is not material to Rivéo.

The exemption does not apply, because it is reserved for leases with a term of 12 months or less.