Car leasing classification under IAS 17

Car leasing classification with repurchase option

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Good morning,
IAS 17 asks for the classification as an operating lease in case the related risks and benefits are not transferred to the lessee.

The European car market is more and more moving to offer customers "loyalty products" that foresee the possibility to hand the car back to the car maker or the financial entity after a certain period /24 months).

Let's assume a leasing contract with the following items:
1. Option for the customer to return the car at the end of the deal or during its life (e.g., 24 months after the inception date);
2. Guarantee on the residual value offered by the lessor (e.g., 40% of the original car list price) so that the customer is not obliged to pay the 40% if the car is handed back;
3. The customer will pay any damages to the car or extra mileage at the time of car return.

Under the conditions above-mentioned, has the contract to be classified as an operating lease since the residual value risk (40% of car list price) is assumed by the lessor and not by the lessee?

What if a 3rd party guaranteed the RV risk at the end of the contract (e.g., a dealer buyback) instead of the lessor (e.g., a car financing institution)? Would the deal be an operating or financial lease for the lessor?
Thanks
Riccardo

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