CERTYNEX IFRS ACADEMY

Morvalis leases a packaging line for 5 years; the lease does not qualify for any exemption. What does Morvalis recognise at the commencement date?

Nothing: lease payments will be expensed when paid.

The line itself as property, plant and equipment, as if it had bought it.

A right-of-use asset, the liability being recognised as payments are made.

A right-of-use asset and a lease liability.