## Scope of AS 19

AS 19 applies to all leases except the following three categories:

### Exclusions from AS 19

Category	Examples
Natural resource exploration/use leases	Oil, gas, metals, minerals
Licensing agreements for intangibles	Motion picture films, video recordings, plays, manuscripts, patents, copyright
Lease agreements to use land	Any land lease

> Why these exclusions? These arrangements involve specialized assets, intangible rights, or natural resources governed by other laws/standards. They have unique risk-reward profiles not covered well by a general lease standard.

### Practical Test

Whenever you see a lease question — first confirm the asset type. If it is machinery, equipment, vehicles, buildings (other than land), aircraft, ships — AS 19 applies. If it is oil fields, copyrights, or land — AS 19 does not apply.

Worked example

### Example 1

AK Sir gives a plot of land on lease to BB Sir for 10 years → AS 19 does NOT apply (land lease exclusion).

### Example 2

Flipkart leases warehouse equipment (racking systems) to a logistics firm for 3 years → AS 19 APPLIES (equipment lease).

### Example 3

A film studio licenses the copyright of a movie to a streaming platform → AS 19 does NOT apply (licensing agreement for motion picture).

⚠️ Common exam mistakes

Applying AS 19 to land leases — land leases are explicitly excluded.
Treating patent/copyright licensing as a lease under AS 19 — licensing of intangibles is excluded.
Forgetting the exclusion for mineral/oil exploration leases and attempting to apply AS 19 to them.

Bare-Act text Para 2 — Scope · AS 19 · click to expand

This Standard should be applied in accounting for all leases other than: (a) lease agreements to explore for or use natural resources, such as oil, gas, timber, metals and other mineral rights; and (b) licensing agreements for such items as motion picture films, video recordings, plays, manuscripts, patents and copyrights; and (c) lease agreements to use lands.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →