12.Which of the following statements correctly describes the initial measurement of a lease liability by a lessee under IFRS? Select one: a. The cost of any bargain purchase option is included in the calculation of the lease liability

12.Which of the following statements correctly describes the initial measurement of a lease liability by a lessee under IFRS? Select one: a. The cost of any bargain purchase option is included in the calculation of the lease liability

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 8RE: Use the following information to decide whether this equipment lease qualifies as an operating,...

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

12.Which of the following statements correctly describes the initial measurement of a lease liability by a lessee under IFRS?

Select one:

The cost of any bargain purchase option is included in the calculation of the lease liability

The lease liability is discounted to its present value using the lessee’s incremental borrowing rate

Guaranteed and unguaranteed residual values are included in the calculation of the lease liability at initial measurement

All variable lease payments are included in the calculation of the lease liability at initial measurement

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Use the following information to decide whether this equipment lease qualifies as an operating, sales-type, or direct financing lease to a lessor. a. There is no transfer of ownership at the end of the lease term. There is no bargain purchase option. The lease term is 60% of the economic life of the leased property. The present value of lease payments, including a residual value guaranteed by the lessee, is 100% of the fair value of the leased property to the lessor. The collectability of the lease payments is reasonably assured. The leased asset was not of a specialized nature. b. Same as (a), except that the residual value is guaranteed by a third party, not the lessee. The present value of the residual value guarantee is 15% of the fair value of the leased property. c. Same as (a), except that: the present value of the lease payments, including a residual value guaranteed by the lessee, is only 50% of the fair value of the leased asset. The collectability of the minimum lease payments is not predictable.
28 Which one of the following is a correct statement of one of the indicators of a finance lease?A. The lease transfers ownership of the property to the lessor.B. The lease contains a purchase option.C. The lease term is for the major part of the economic life of the leased property.D. The minimum lease payments (excluding executory costs) equals or exceeds 90% of the fair value of the leased property.
On the balance sheet, the lease liability is measured as ________. Group of answer choices the present value of the lease payments less the present value of the guaranteed residual value (if any) the present value of the lease payments plus the future value of the guaranteed residual value (if any) the present value of the lease payments plus the present value of the guaranteed residual value if the lessee guarantees it(if any) the future value of the lease payments plus the future value of the guaranteed residual value (if any)
31 The interest rate implicit in the lease is the discount rate that causes the aggregate of the present value of the minimum lease payments and the unguaranteed residual value to be equal to theA. fair value of the leased asset.B. fair value of the leased asset and initial direct costs of the lessor.C. fair value of the leased asset and initial direct costs of the lessee.D. gross investment in the lease.
Which one of the following would normally lead to a lease being classified as an operating lease? a. The lease term is for a period of more than half of the expected economic life of the underlying asset. b. At the inception date of the lease agreement, the present value of the total lease payments is for an amount substantially less than the fair value of the underlying asset. c. The lease is cancellable, and all losses associated with the cancellation will be incurred by the lessee. d. It is reasonably certain at the inception date that the lessee will exercise an option to purchase the underlying asset at the end of the lease term for a price substantially lower than its expected fair value.
1. Gross investment in the lease is equal to Present value of lease payments under a finance lease of the lessor and any unguaranteed residual value. Sum of the lease payments receivable by a lessor under a finance lease and any unguaranteed residual value accruing to the lessor The lease payments under a finance lease of the lessor Present value of the lease payments under a finance lease of the lessor.
question 1: There are nine itsms list under "quantitive disclosure" for the lease. Why aren't short-term lease cost and variable lease cost shown? question 2 : What is the amount cintractual obligations and options that the lessee is reasonably certain to excercise for Operating lease? financing lease?
Which of the following is true regarding IFRS 16? a. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the net investment in the lease. b. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease. c. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the net investment in the lease. d. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease less any initial direct cost paid by the lessor.
29 Lessors shall recognize assets held under a finance lease in a statement of financial position as a receivable at an amount equal to theA. gross investment in the lease B. net investment in the lease C. gross rentals D. residual value, whether guaranteed or unguaranteed
The lessee normally measures the lease liability to be recorded as the: Select one: a. Present value of the minimum lease payments. b. The future value of the minimum lease payments c. The fair market value of the leased asset. d. The sum of the cash payments over the term of the lease.
For which of the following conditions will the lessor classify a lease as a sales-type lease? a.The leased asset may be exchanged for a similar asset during the lease term. b.The present value of the sum of the lease payments is equal to or more than the fair value of the underlying asset. c.The lease term is less than one year. d.The lease term is half of the underlying asset’s economic life.
At the inception of a capital lease, the guaranteed residual value should be a. Included as part of minimum lease payments at present value. b. Included as part of minimum lease payments at future value. c. Included as part of minimum lease payments only to the extent that guaranteed residual value is expected to exceed estimated residual value. d. Excluded from minimum lease payments.