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In determining the present value of minimum lease payments under IFRS, it is essential to understand what constitutes those payments. Minimum lease payments generally include fixed payments, variable payments that depend on an index or rate, and amounts that are reasonably assured to be paid to the lessor.

The inclusion of initial direct costs paid by the lessee is significant because these costs are directly attributable to negotiating and arranging the lease. According to IFRS 16, initial direct costs should be added to the right-of-use asset right at the inception of the lease, which ultimately affects the present value calculation.

On the other hand, executory costs related to maintenance, optional buyout amounts, and estimated future repairs do not qualify as minimum lease payments for the purpose of calculating the present value. Maintenance costs are typically not included because they are not guaranteed payments and may vary based on usage and condition. Optional buyout amounts may not be included unless they are reasonably certain to be exercised, making their inclusion uncertain. Similarly, future repairs rely on estimates and are not committed amounts that arise under the lease contract.

Thus, the inclusion of initial direct costs highlights their importance in presenting a complete and relevant financial position regarding lease obligations, aligning with the principles established in IFRS standards.