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Chapter 7

3.5 Operating leases

A lessor recognises income from an operating lease on a straight line basis over the
lease term.

Any direct costs of negotiating the lease are added to the cost of the underlying
asset.

The underlying asset should be recognised and measured in accordance with IAS 16
Property, Plant and Equipment or IAS 38 Intangible Assets.

Illustrations and further practice

Now try TYU 8 from Chapter 7.

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