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Asked Jan 28, 2020
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A lease might specify that rental payments may be increased (or decreased) at some future time during the lease term depending on whether or not some specified event occurs such as revenues or profits exceeding some designated level. Under what circumstances are contingent rentals included or excluded from minimum lease payments? If excluded, how are they recognized in income determination?

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The contingent rentals are excluded from lease payments. Instead they are reported in the disclosure notes by both the lessor and lessee. The main reason is that t...

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