All of the following are differences with respect to the accounting for leases, under IFRS and GAAP, except: IFRS has an additional lessee recognition and measurement exemption for leases of assets of low value (GAAP does not). IFRS allows alternative measurement bases for the right-of-use asset (e.g., the revaluation model). under IFRS, lessees use the same tests to determine if a lease should be classified as finance or operating. IFRS permits recognition of selling profit on direct financing leases at lease commencement.

All of the following are differences with respect to the accounting for leases, under IFRS and GAAP, except: IFRS has an additional lessee recognition and measurement exemption for leases of assets of low value (GAAP does not). IFRS allows alternative measurement bases for the right-of-use asset (e.g., the revaluation model). under IFRS, lessees use the same tests to determine if a lease should be classified as finance or operating. IFRS permits recognition of selling profit on direct financing leases at lease commencement.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 14Q

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Similar questions

Which of the following is false with respect to lease accounting under IFRS? IFRS require lessees to recognize a right-of-use asset and related lease liability for leases with terms longer than one year. IFRS does not include any explicit guidance on collectibility of the lease payments by lessors and amounts necessary to satisfy a residual value guarantee. IFRS does not permit recognition of selling profit on direct financing leases at lease commencement. IFRS uses essentially the same lessor accounting model as GAAP for leases classified as sales-type or operating.
Which of the following statements are false under a sale a leaseback transaction? I. If a sale and leaseback transactions results in a finance lease, any excess of proceeds over the carrying amount shall not be immediately recognized as income by a seller-lessee. Instead, it shall be deferred and amortized over the lease term. II. If the sale price is established at fair value under an operating lease, any gain or loss shall be deferred and amortized over the period which the asset is expected to be used. I only II ONLY BOTH I AND II NEITHER I OR II
Which of the following is not included in the evaluation questions of IFRS 16 in identifying a lease contract? a. Does the lessee have the right to obtain all of the economic benefits from the use of the asset? b. Does the lessee direct the use of the identified asset throughout the period of use? c. Does the lessor have a substitution right over the asset? d. Is there an identified asset?
If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, an entity shall make the following adjustments to measure the sale proceeds at fair value? any below-market terms shall be accounted for as a prepayment of lease payments both of the other choices either of the other choices any above-market terms shall be accounted for as additional financing provided by the buyer-lessor to the seller-lessee
When a sale-leaseback transaction occurs, if the leaseback is considered to be an operating lease, and the lease payments and sales price are at fair value, any gain on the sale a. Is amortized over the lease term by a company using IFRS. b. Is recognized immediately by a company using IFRS. c. Is amortized over the lease term by a company using either U.S. GAAP or IFRS. d. Is not recorded by a company using IFRS.
Which of the following statements is correct regarding the accounting for leases? The lessee depreciates the leased asset under a “short-term” or a “low-valued asset” lease The lessor depreciates the leased asset under a finance lease An entity can never be both a lessor and a lessee of a same leased asset When discounting lease payments both the lessor and the lessee use the interest rate implicit in the lease, unless the lessee cannot determine this rate
All of the following are similarities with respect to the accounting for leases, under IFRS and GAAP, except: lessees recognize a right-of-use asset and related lease liability for leases with terms longer than one year. lessees use the same general lease classification criteria to determine if lessees classify leases as finance or operating. lessors under IFRS and GAAP use the same model to account for sales-type leases. GAAP and IFRS have similar qualitative and quantitative disclosure requirements for lessees and lessors.
One of the following statements is false: a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller-lessee in a sales and leaseback transaction is not recognized.
Under IFRS: lessees may use alternative measurement bases (e.g., revaluation accounting) for the right-of-use asset. different measurement bases may be used for the right-of-use asset but only for leases with terms less than one year. the same guidance on collectibility of the lease payments is used by lessors as in GAAP. lessors are required to defer gross profit on direct financing leases
Which of the following is incorrect regarding the accounting for leases by a lessee? A. A lessee recognizes the same total amount of expense on a lease whether it uses the general recognition or the recognition exemption under PFRS 16. B. The interest expense on a lease liability decreases each period C. According to PFRS 16, executory costs, such as insurance and real property taxes, are always excluded from lease payments regardless of whether these costs transfer goods or services to the leasee. D. A lessee shall allocate the total consideration in a contract to the lease components and non-lease components of the contract
How should an entity account for a short-term or low-value lease under PFRS 16? Group of answer choices Recognize an discounted present value of future payments. On a straight-line basis unless the use of the asset allows for a more appropriate treatment. Recognize the expense as it is paid. The same treatment as long-term leases
For a transaction to be a lease under ASC 842 it must contain an “identified asset”. Which of the following is not a condition for an asset to qualify as an “identified asset”? The customer can direct the use of the asset. The asset is explicitly or implicitly identified in the contract. The asset is physically distinct or the customer has rights to substantially all of the asset’s capacity. The supplier does not have a substantive substitution right.