The correct answers: One which transfers substantially all the risks and rewards of ownership to a lessee; One where the present value of the minimum lease payments amounts to substantially all of the fair value of the leased asset; and One where the commercial substance of a transaction reflects ownership eg. where the lessee has continuous use of the leased asset over its life.

You must know the distinction between finance and operating leases. A finance lease transaction in substance is the same as ownership for the lessee, although legally the asset is still owned by the lessor. An operating lease is typically for a short time period and is essentially a contract for hire.

The '75% test' on life of the lease and life of the asset is not mentioned in IAS 17, although it is a commonly used test in US GAAP.