82 Where the Company has purchased goods or services as a lessee, and the lease has been determined to be an operating lease, rental payments are expensed on a straight-line basis over the life of the lease. The Company has not entered into any finance lease arrangements as a lessee. For those PPAs determined to be operating leases with the Company as the lessor, revenue is recognized on a straight-line basis unless another method better represents the earnings process. Payments received under PPAs classified as finance leases are segmented into those for the lease and those for other elements on the basis of their relative fair value. For those PPAs determined to be finance leases with the Company as the lessor, finance income is recognized in a manner that produces a constant rate of return on the net investment in the lease. The net investment is composed of minimum lease payments and unearned finance income. Unearned finance income is the difference between the total minimum lease payments and the carrying amount of the leased property. Unearned finance income is deferred and recognized into net income over the lease term. The Company has entered into PPAs to sell power at predetermined prices. PPAs are assessed as to whether they contain leases which convey to the counterparty the right to the use of the Company's property, plant and equipment in return for payment. Such types of arrangements may be classified as either finance or operating leases. PPAs that transfer substantially all of the benefits and risks of ownership of property from the Company are classified as finance leases. PPAs that do not transfer substantially all of the benefits and risks of ownership of property, plant and equipment are classified as either operating leases or executory contracts. Monetary contributions received from third parties used to either connect a customer to a network or to provide the customer with ongoing access to a supply of goods or services are measured at fair value of the cash received and are initially recorded as deferred revenue. Revenue is recognized as the service is performed, or if an ongoing service is performed as part of an agreement, over the life of the agreement but no longer than the life of the asset. Payments received on one of the Company’s operating leases may be in excess of accounting lease revenues. In such cases, the Company records deferred revenue on its consolidated statement of financial position. Deferred revenues Revenues also include realized and unrealized gains and losses from derivatives used in the risk management of the Company's generation activities related to commodity prices and foreign currency risk, and from the Company's proprietary trading activities. Realized gains and losses are recognized when the settlement of short positions occurs and unrealized gains and losses are recorded as revenues based on the related changes in the fair value of the financial instrument at the end of each reporting period. Derivative instruments 2. Significant accounting policies, continued: (f) Revenue recognition, continued: (g) Leases or arrangements containing a lease: CAPITAL POWER CORPORATION Notes to the Consolidated Financial Statements (Tabular amounts in millions of Canadian dollars, except share and per share amounts)