A soft toys retailer (Customer) enters into a 3 year contract with a multi-level shopping centre operator (Supplier) to use a kiosk space in its shopping centre to sell its soft toys. The contract specifies the kiosk size of the space and that the space can be located at any one of the levels within the shopping centre. The Supplier has the right to change the location of the kiosk space allocated to the Customer at any time during the contract period at minimal costs. The Supplier has many available spaces of the same kiosk size which meet the criteria specified in the contract. Customer uses its own kiosk that it can move easily to sell its soft toys. Which of the following is correct in accordance with AASB 16 Leases?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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A soft toys retailer (Customer) enters into a 3 year contract with a multi-level shopping
centre operator (Supplier) to use a kiosk space in its shopping centre to sell its soft toys.
The contract specifies the kiosk size of the space and that the space can be located at
any one of the levels within the shopping centre. The Supplier has the right to change
the location of the kiosk space allocated to the Customer at any time during the contract
period at minimal costs. The Supplier has many available spaces of the same kiosk size
which meet the criteria specified in the contract. Customer uses its own kiosk that it can
move easily to sell its soft toys.
Which of the following is correct in accordance with AASB 16 Leases?
The contract is a lease as the Supplier has control over the kiosk space.
The contract is a lease as the size of the kiosk space is specifically stated in the contract.
The contract is a lease as the Supplier has substantive substitution rights over the kiosk space.
The contract does not contain a lease because there is no identified asset.
Transcribed Image Text:A soft toys retailer (Customer) enters into a 3 year contract with a multi-level shopping centre operator (Supplier) to use a kiosk space in its shopping centre to sell its soft toys. The contract specifies the kiosk size of the space and that the space can be located at any one of the levels within the shopping centre. The Supplier has the right to change the location of the kiosk space allocated to the Customer at any time during the contract period at minimal costs. The Supplier has many available spaces of the same kiosk size which meet the criteria specified in the contract. Customer uses its own kiosk that it can move easily to sell its soft toys. Which of the following is correct in accordance with AASB 16 Leases? The contract is a lease as the Supplier has control over the kiosk space. The contract is a lease as the size of the kiosk space is specifically stated in the contract. The contract is a lease as the Supplier has substantive substitution rights over the kiosk space. The contract does not contain a lease because there is no identified asset.
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