Recognition exemptions
Recognition exemptions (paragraphs B3–B8)
5
A lessee may elect not to apply the requirements in paragraphs 22–49 to:
(a) short-term leases; and
(b) leases for which the underlying asset is of low value (as described in paragraphs B3–B8).
6
If a lessee elects not to apply the requirements in paragraphs 22–49 to either short-term leases or leases for which the underlying asset is of low value, the lessee shall recognise the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis. The lessee shall apply another systematic basis if that basis is more representative of the pattern of the lessee’s benefit.
7
If a lessee accounts for short-term leases applying paragraph 6, the lessee shall consider the lease to be a new lease for the purposes of this Standard if:
(a) there is a lease modification; or
(b) there is any change in the lease term (for example, the lessee exercises an option not previously included in its determination of the lease term).
8
The election for short-term leases shall be made by class of underlying asset to which the right of use relates. A class of underlying asset is a grouping of underlying assets of a similar nature and use in an entity’s operations. The election for leases for which the underlying asset is of low value can be made on a lease-by-lease basis.