How is this different to Substance Criteria for IFRS/US GAAP

The following statement states that you can structure a lease to be an operating lease even though the benefits and risks of ownership have been transferred to the lessee. Doesn’t this mean this lease should be classified as a finance/capital lease?

“What is of concern to analysts is when a lease conveys to the lessee most of the benefits and risks of ownership but the lease is accounted for as an operating lease—giving rise to off-balance-sheet financing.”

(Institute 719)

Institute, CFA. 2016 CFA Level I Volume 3 Financial Reporting and Analysis. CFA Institute, 07/2015. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

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After all, the qualification is the following:

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“Under IFRS, if substantially all the risks and rewards incidental to ownership are transferred to the lessee, the lease is classified as a finance lease and the lessee reports a leased asset and a lease obligation on the balance sheet.”

(Institute 501)

Institute, CFA. 2016 CFA Level I Volume 3 Financial Reporting and Analysis. CFA Institute, 07/2015. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

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How are these two statements different which allows for a qualification of a lease with substantially all risks being transferred to the lessee still being classified as an operating lease?

The first statement doesn’t say that a company is allowed to structure such a lease as an operating lease, only that some companies _ do _, even though they shouldn’t.

Hello,

The statement “What is of concern to analysts is when a lease conveys to the lessee most of the benefits and risks of ownership but the lease is accounted for as an operating lease—giving rise to off-balance-sheet financing.” only says this a concern (issue) and that analysts should make sure they detect.

Thanks,