Customer X enters into a three-year contract with Supplier Y for the use of a bus. The bus shall be used as a shuttle service for customer X’s guests. Supplier Y owns a fleet of buses and each of these buses meets the specifications of Customer X. The contract requires Supplier Y to make available for Customer X the use of a bus throughout the duration of the contract. Supplier Y provides a driver for the bus and decides which one of it’s many buses will be provided to Customer X. This would depend, for example, on the number of guest that will be using the bus and the destination whether long trip or short trip. Customer X decides the time of use and the destination. Only the guests of Customer X shall be the passengers when the bus is used. After Customer X’s use, the bus is kept in Supplier Y’s premises.Requirement: Identify if the contract is ( or contains) a lease using the guidance in PFRS 16. Provide brief explanations.
RECOMMENDED!!ACCTG.-101-Customer X enters into a three-year
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