In Calculating the Present Value of the Minimum Lease Payments

question 27

Multiple Choice

In calculating the present value of the minimum lease payments, IFRS requires the lessee should

• A) use its incremental borrowing rate in all cases.
• B) use either its incremental borrowing rate or the interest rate implicit in the lease, whichever is higher.
• C) use either its incremental borrowing rate or the interest rate implicit in the lease, whichever is lower.
• D) use the interest rate implicit in the lease whenever this is reasonably determinable, otherwise use the lessee's incremental borrowing rate.

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