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Answer: may recognize lease payments on a straight-line basis.
**Explanation:** For leases with a term of twelve months or less, lessees can elect to recognize lease payments on a straight-line basis under both IFRS and US GAAP. This exemption is applicable for short-term leases or leases of low-value assets (up to $5,000 under IFRS). Options B and C are incorrect because they describe the general lease accounting model, which requires recording a "right-of-use" asset and lease liability at the present value of future lease payments. This does not apply to short-term leases where the exemption is elected.
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For leases with a term of twelve months or less, the lessee:
A
may recognize lease payments on a straight-line basis.
B
must report at lease inception a "right-of-use" asset and a lease liability, both equal to the present value of future lease payments.
C
must report at lease inception a "right-of-use" asset and a lease liability, both equal to the undiscounted value of future lease payments.
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