CERTYNEX IFRS ACADEMY

Estrel, a shipowner and lessor, leases a support vessel under a finance lease. On 1 July 20X3, the parties substantially shorten the lease term, without adding any asset. Estrel's documented analysis concludes that, had this modification been in effect at the inception date, the lease would have been classified as an operating lease. Immediately before the effective date of the modification, the net investment amounts to 180,000; the fair value of the vessel is estimated at 210,000. Which treatment complies with IFRS 16?

Recognise the vessel at its fair value of 210,000 and recognise a gain of 30,000, then apply operating lease accounting.

Keep the receivable and apply IFRS 9 to the modification, since the lease was originally classified as a finance lease.

Account for the modification as a new lease from 1 July 20X3 and recognise the vessel at 180,000.

Remeasure the net investment by discounting the remaining payments at a revised rate, with the difference in profit or loss.