CERTYNEX IFRS ACADEMY

The lessor Pradelle leases a construction machine for 5 years. The lessee may buy it at the end of the lease for 5,000, whereas the expected fair value of the machine at that date is about 60,000. How is this option taken into account in the classification?

It is only taken into account when the lessee actually exercises it.

Since its exercise is reasonably certain at the inception date, it would normally lead to a finance lease.

It is never taken into account, as the lessor remains the owner until exercise.

It leads to an operating lease, then a reclassification as a finance lease if the lessee exercises it.