Right to use an underlying asset
BC22 The IASB’s Conceptual Framework for Financial Reporting (Conceptual Framework) [References to the Conceptual Framework in this Basis for Conclusions are to the Conceptual Framework for Financial Reporting, issued in 2010 and in effect when the Standard was developed.] defines an asset as ‘a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity’. The IASB concluded that a lessee’s right to use an underlying asset meets the definition of an asset for the following reasons:
(a) the lessee controls the right to use the underlying asset throughout the lease term. Once the asset is made available for use by the lessee, the lessor is unable to retrieve or otherwise use the underlying asset for its own purposes during the lease term, despite being the legal owner of the underlying asset.
(b) the lessee has the ability to determine how to use the underlying asset and,
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