Identify if the contract is a lease using the guidance

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Customer X enters into a three-year contract with Supplier Y for the use of a bus. The bus shall be used as a shuttle service for Customer X's guests. Supplier Y owns a fleet of buses and each of those buses meets the specifications of Customer X. The contract requires Supplier Y to make available for Customer X the use of a bus throughout the duration of the contract. Supplier Y provides a driver for the bus and decides which one of its many buses will be provided to Customer X. This would depend, for example, on the number of guests that will be using the bus an the destination - whether long trip or short trip. Customer X decided the time of use and the destination. Only the guests of Customer X shall be the passengers when the nus is used. After Customers X's use, the bus is kept in Supplier Y's premises.

Requirement:

Problem 1: Identify if the contract is (or contains) a lease using the guidance in PRFS 16. provide brief explanations.

Reference no: EM132618380

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