CERTYNEX IFRS ACADEMY

The industrial printer manufacturer Ventaris enters into a finance lease with a customer. To obtain this lease, it incurred 3,000 of sales commissions and legal fees. Legal title to the printer will pass to the customer only at the end of the lease. The management accountant proposes to include this 3,000 in the net investment as initial direct costs and to defer the selling profit until title passes. Which position complies with IFRS 16?

Include the 3,000 in the net investment and defer the profit until title passes.

Capitalise the 3,000 as a prepaid expense amortised over the lease term and recognise the profit at the commencement date.

Expense the 3,000 and defer the profit until title passes to the customer.

Expense the 3,000 at the commencement date and recognise the selling profit at that date too.