Customer has the right to change these decisions throughout the five year

Customer has the right to change these decisions

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transport. Customer has the right to change these decisions throughout the five-year period of use.Does the supplier has the right to direct how and for what purpose the asset is used throughout the period of use ?No, although the operation and maintenance ofthe ship are essential to its efficient use, Supplier’s decisions in this regard do not give it the right to direct how and for what purpose the ship is used. Instead, Supplier’s decisions are dependent upon Customer’s decisions about how and for what purpose the ship is used.If neither, the customer nor the supplier has the right to directNA13
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Part 6: Chapter 1 – Leases (IFRS 16)how and for what purpose the asset is used, does the customer have the right to operate the asset ?If neither, the customer nor the supplier has the right to directhow and for what purpose the asset is used, did the customerdesigned the asset in a way that predetermines how and for what the asset will be used ?NAConclusion: the contract contains a lease.5.Utility companyIs there an identified asset ?Yes, the solar farm is explicitly specified in the contract, and Supplier does not have the right to substitute the specified solar farm.Does the customer have the right to obtain substantially all ofthe economic benefits from use of the asset throughout the period of use ?Yes, Customer takes all of the electricity produced by the farm over the 20-year period of use as well as the renewable energy credits that are a by-product from use of the solar farm. Although Supplier will receive economic benefits from the solar farm in the form of tax credits, those economic benefits from the solar farm in the form of tax credits, those economic benefits relate to the ownership of the solar farm rather than the use of the solar farm and, thus, are not considered in this assessment.Does the customer have the right to direct how or for what purpose the asset is used throughout the period of use?No, neither the customer nor supplier decides how and for what purpose the solar farm is used during the period of use because those decisions are predetermined by the design of the asset (ie the design of the solar farm has, ineffect, programmed into the asset any relevant decision-making rights about how and for whatpurpose the solar farm has, in effect, programmed into the asset any relevant decision-making rights about how and for whatpurpose the solar farm is used throughout the period of use.Does the supplier has the right to direct how and for what purpose the asset is used throughout the period of use ?No, neither the customer nor supplier decides how and for what purpose the solar farm is used during the period of use because those decisions are predetermined by the design of the asset (ie the design of the solar farm has, ineffect, programmed into the asset any relevant decision-making rights about how and for whatpurpose the solar farm has, in effect, programmed into the asset any relevant decision-making rights about how and for whatpurpose the solar farm is used throughout the period of use.14
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Part 6: Chapter 1 – Leases (IFRS 16)If neither, the customer nor the supplier has the right to directhow and for what purpose the asset is used, does the customer have the right to operate the asset ?No, the customer does not operate the solar farm. If neither, the customer nor the supplier has the right to directhow and for what purpose the asset is used, did the customerdesigned the asset in a way that predetermines how and for what the asset will be used ?Customer’s design of the solar farm has given itthe right to direct the use of the farm. Because the design of the solar farm has predetermined how and for what purpose the asset will be used through the period of use, Customer’s control over that design is substantively no different from Customer controlling those decisions.Conclusion: The contract contains a lease.LESSEES
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  • Summer '17
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  • Lessee, Finance lease

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