AS 19: Leases (Finance vs Operating)

AFM Definition, Scope & Accounting Standards including Ind AS Free JAIIB Capsule 28 views Updated 16 Sep 2026

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AFM · Definition, Scope & Accounting Standards including Ind AS

What is the primary objective of AS 19, and how does it generally classify leases based on risks and rewards?

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AS 19 prescribes accounting policies for lessors and lessees. Leases are classified as Finance or Operating based on the transfer of risks and rewards.

AS 19 applies equally to sale and leaseback transactions. A finance lease transfers substantially all the risks and rewards incident to ownership.

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AS 19: Leases (Finance vs Operating) — Full Text

What is the primary objective of AS 19, and how does it generally classify leases based on risks and rewards?

Answer

AS 19 prescribes accounting policies for lessors and lessees. Leases are classified as Finance or Operating based on the transfer of risks and rewards.

Additional notes

AS 19 applies equally to sale and leaseback transactions. A finance lease transfers substantially all the risks and rewards incident to ownership.

Part of Accounting & Financial Management for Bankers · Definition, Scope & Accounting Standards including Ind AS · Last updated 16 Sep 2026

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