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How does an operating lease differ from financial lease Modus-oparandi and accounting treatment asper IFRS is welcome.

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Question added by Jaleel Shaik , Director Corporate , K.A.R.Group of Companies
Date Posted: 2015/04/09
Junaid Arshad
by Junaid Arshad , Senior Manager Finace , Jovago Pakistan (Pvt.) Ltd.| Venture Rocket Internet AIG

There are few criterias outlined in IFRS / IAS before deciding the transaction is Finance lease or operating lease.

In operating lease the ownership is not transferred to lessee and on other hand ownership of an asset is transferred to lessee at the end of the term.

Lease would be treated as finance lease if the major portion of the term or may I call it the tenure is used by lessee.

 

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