Document ID: chunk:federal_register_of_legislation:F2024C00049:body:0:p18
Version: federal_register_of_legislation:F2024C00049
Segment Type: other
Provision Reference: 
Character Range: 44030–46770

lessor shall revise the income allocation over the lease term and recognise immediately any reduction in respect of amounts accrued.
78 A lessor that classifies an asset under a finance lease as held for sale (or includes it in a disposal group that is classified as held for sale) applying AASB 5 Non-current Assets Held for Sale and Discontinued Operations shall account for the asset in accordance with that Standard.

Lease modifications
79 A lessor shall account for a modification to a finance lease as a separate lease if both:
(a) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and
(b) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.
80 For a modification to a finance lease that is not accounted for as a separate lease, a lessor shall account for the modification as follows:
(a) if the lease would have been classified as an operating lease had the modification been in effect at the inception date, the lessor shall:
(i) account for the lease modification as a new lease from the effective date of the modification; and
(ii) measure the carrying amount of the underlying asset as the net investment in the lease immediately before the effective date of the lease modification.
(b) otherwise, the lessor shall apply the requirements of AASB 9.

Operating leases

Recognition and measurement
81 A lessor shall recognise lease payments from operating leases as income on either a straight-line basis or another systematic basis. The lessor shall apply another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished.
82 A lessor shall recognise costs, including depreciation, incurred in earning the lease income as an expense.
83 A lessor shall add initial direct costs incurred in obtaining an operating lease to the carrying amount of the underlying asset and recognise those costs as an expense over the lease term on the same basis as the lease income.
84 The depreciation policy for depreciable underlying assets subject to operating leases shall be consistent with the lessor's normal depreciation policy for similar assets. A lessor shall calculate depreciation in accordance with AASB 116 and AASB 138.
85 A lessor shall apply AASB 136 to determine whether an underlying asset subject to an operating lease is impaired and to account for any impairment loss identified.
86 A manufacturer or dealer lessor does not recognise any selling profit on entering into an operating lease because it is