BC105 IFRS 16 defines a lease on the basis of whether a customer controls the use of an identified asset for a period of time, which may be determined by a defined amount of use. If the customer controls the use of an identified asset for a period of time, then the contract contains a lease. This will be the case if the customer can make the important decisions about the use of the asset in a similar way to that in which it makes decisions about owned assets that it uses. In such cases, the customer (the lessee) has obtained the right to use an asset (the right-of-use asset) that it should recognise in its balance sheet (subject to the recognition exemptions in paragraph 5 of IFRS 16). In contrast, in a service contract, the supplier controls the use of any assets used to deliver the service.
BC106 The 2010 Exposure Draft essentially retained the definition of a lease in IAS 17 and the accompanying requirements in IFRIC 4. Many respondents expressed concerns about the
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