Which of the following are steps performed by a lessor to initially recognize a finance lease under IFRS 16? Select all Choose three that apply.
Recognize the net investment in the lease
Derecognize the incremental costs of obtaining the lease
Recognize, in profit or loss, any selling profit or selling loss
Derecognize the carrying amount of the underlying asset
Under IFRS 16, a lessor would typically: 1. Recognize the net investment in the lease 2. Derecognize the incremental costs of obtaining the lease 3. Recognize, in profit or loss, any selling profit or selling loss
These steps describe the accounting treatment a lessor would apply when recognizing a finance lease. The lessor would recognize the net investment in the lease, derecognize the incremental costs directly attributable to obtaining the lease, and recognize any selling profit or loss in their profit or loss.
