CERTYNEX IFRS ACADEMY

A trainee at Pelvane has to apply the flowchart provided in IFRS 16 to determine whether a contract is, or contains, a lease. In what order does the flowchart sequence the questions?

Amount of consideration, then contract term, then existence of an identified asset.

Right to direct the use, then identified asset, then economic benefits.

Identified asset, then substantially all of the economic benefits, then right to direct the use.

Identified asset, then right to direct the use, with no review of the economic benefits.