Reference no: EM132967910

Question - Simon & Simon Limited (S&S) is a conglomerate in the region. Simon, the operation manager, entered into the three contracts below during the year.

Contract A - To enable employees to report duty on time and leave office conveniently, Simon contracted with Punctual Delivery Limited (PD) for transportation of S&S's employees. PD picked up employees at designated pick-up points at designated time slots. However, it could choose the type, the number and the capacity of vehicles used for transportation. The vehicles used displayed S&S's logo and name and did not pick up passengers other than S&S's employees.

Contract B - Because the volume of mails was increasing, Simon contracted with the Post Office for the use of a post office box which was in a designated location in the Office. Vendors, suppliers and other parties to S&S were required to send correspondence to the post office box instead of the headquarters of S&S. On weekdays, an office assistant collected all mails from the box. The Post Office would not relocate the box or operate it except for delivery of mails.

Contract C - Simon contracted with a landlord in a remote location for a flat for operational needs of employees. Employees who had to carry out duties in the remote location culd apply for a key to the flat for one night's stay so that they did not have to travel back home at midnight. During public holidays or on weekends, employees could also apply for a short period's stay in the flat with their family members to enjoy the countryside.

Required - Discuss whether each of the contracts is or contains a lease under HKFRS 15 Leases.