Characteristic Of Finance Lease

Tabulate below are the characteristic that indicates it as a Finance lease:-

Transfer of ownership at the end of the lease term to a lessee [IAS17.10(a)(R.05)].
The lessee has a bargain purchase option [IAS17.10(b)(R.05)].
The lease term covers the major part of the asset’s economic life [IAS17.10(c)(R.05)].
Payments made by a lessee that are a substantial portion of a leased asset’s fair value might be presumed to give rise to a finance lease
The leased asset is constructed to the lessee’s specification and could not be used by others without significant modification [IAS17.10(e)(R.05)]

FMAccounting.com