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Company A grants the right to Company B to use its business for 5 years. All Net profit goes to B. However B pays to A the management fee. Is this a lease arrangement under IFRS 16?
in IFRS 16 - Leases by

1 Answer

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All arrangements that meet the definition of a lease except for:

(a) Leases to explore for minerals, oil, natural gas and similar non-regenerative resources

(b) Leases of biological assets within the scope of IAS 41 Agriculture held by a lessee

(c) Service concession arrangements within the scope of IFRIC 12

(d) Licenses of intellectual property granted by a lessor within the scope of IFRS 15 Revenue from Contracts with Customers

(e) Rights held by a lessee under a licensing agreement within the scope of IAS 38 Intangible Assets (eg. Rights to motion pictures, video recordings, plays, patents and copyrights, etc.)

A lessee is also permitted, but not required, to apply IFRS 16 to leases of intangible assets other than those described in (e) above.
by Level 5 Member (25.6k points)