CERTYNEX IFRS ACADEMY

The lessor Quintal leases a plot of land and the factory built on it. Lacking comparable transactions, it cannot reliably allocate the lease payments between the two elements. The analysis of the factory shows finance lease characteristics, and nothing clearly establishes that both elements would be operating leases. How should the lease be classified?

As an operating lease in full, out of prudence, since no reliable allocation is available.

By splitting the payments equally, then classifying each element separately.

As a finance lease for the lease as a whole.

As a finance lease for the factory and an operating lease for the land, based on an estimated split.