Compare the way a bargain purchase option and a residual value are treated by the lessee when determining minimum lease payments.

Q: List the sequence of events for the lessee that leads to a lease arrangement.

A: The legal agreement where there are two parties, one party convinces his property to another party…

Q: What comprises a lessee’s minimum lease payments? What is excluded?

A: A lease is a contractual obligation under which one party (lessee) uses the assets or resources of…

Q: Explain when and how a lessee accounts for a lease by the short-cut method.

A: The shortcut method is when the lessee and the lessor don't account for the lease at its…

Q: In accounting for a finance lease/sales-type lease, how are the lessee’s and lessor’s income…

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Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

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Q: Explain the impact on lease accounting of uncertainties, including uncertain lease terms, variable…

A: Uncertainties in lease transactions: There are several issues with respect to lease transactions…

Q: What does the present value of the residual value of a lease asset is called? Describe about it in…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: Explain when and how a lessee accounts for a lease by the shortcut method.

A: The shortcut method is when the lessee and the lessor don't account for the lease at its…

Q: Which of the following payment/s is/are included along with lease liability?   a- All of them b-…

A: According to IAS 17, LEASES, There are two types of Leases: 1. Finance Lease 2. Operating Lease

Q: Lease payments are payments made by a lessee to a lessor relating to the right to use an underlying…

A: The standard states that lease payments for the lessee includes the following a.) Exercise price of…

Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: A lessor will record interest income if a lease is classifi ed as:A . a capital lease.B . an…

A: Introduction: Leasing is a mechanism by which the company may receive certain capital assets for…

Q: accounting processes necessary for a lessee to use the operating lease technique.

A: Operating lease refers to the lease or contract which allows the asset use and it does not convey…

Q: Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The…

A: Answer: Option 4 - All of the above. Reason: If a lease meets one or more of the following criteria,…

Q: Explain the difference in lessor income statement presentation for a sales-type versus operating…

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: The appropriate valuation of an operating lease in the balance sheet of the lessee is? right of use…

A: The appropriate valuation of an operating lease in the balance sheet of the lessee is Nil.... Only…

Q: ect the le

A: Introduction : In simple words, leasing refers to the phenomenon under which an one entity use the…

Q: The term of a finance lease includes the initial lease term and any bargain renewal terms.    True…

A: The answer for the True or false question is discussed hereunder : What is a finance lease?  Finance…

Q: What is the reason for excluding variable lease payments from the measurement of the lessee’s lease…

A: Under IFRS 16, In lease payments there are two types of payments. One is fixed and other is variable…

Q: Leasing Cost Why the aftertax borrowing rate is the appropriate discount rate to use in lease…

A: Lease evaluation is the process where financial lease is evaluated on the basis of its feasibility…

Q: It is that portion of the lease payments that is not fixed in amount but is based on a factor other…

A: Contingent rent is considered as a rental payment that varies with the future amount which is not…

Q: his type of lease involves recognition of a manufacturer’s or dealer’s profit or loss on the…

A: Step 1 In a sales-type lease, the lesser is assumed to be selling a product to the lessee, which…

Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

A: The lessor’s discount rate is the effective interest rate when determining the present value of…

Q: A lessee should classify a lease transaction as a capital lease if it is noncancelable and one or…

A: Explain the criteria for defining the lease as capital lease or operating lease: As per the notes…

Q: Explain the distinction between a direct-financing leaseand a sales-type lease for a lessor.

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Q: Describe about the EFFECT OF A RESIDUAL VALUE ON LEASE CLASSIFICATION?

A: Introduction Residual value is the amount, the asset's owner earns after selling/disposing that…

Q: When a lease qualifies as a finance lease, what amount is initially recorded as the cost of the…

A: Solution Concept In case of finance lease , The initial cost of right of use asset include…

Q: How do you think expense stops and CPI adjustments in leases affect the riskiness of the lease from…

A: INTRODUCTIONLease is a contract in which the right to use the asset is given by the lessor to the…

Q: Leasing Cost Explain why the aftertax borrowing rate is the appropriate discount rate to use in…

A: The borrowing rate is defined as the interest rate that includes many kinds of interest rates. The…

Q: Under IFRS, in computing the present value of the minimum lease payments, the lessee should:(a) use…

A: Minimum lease payment: An amount which is payable to the lessor by the lessee when the lease…

Q: Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?

A: Leases: Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: When are initial direct costs recognized in an operating lease? In a direct financing lease? In a…

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Q: What nonlease costs might be included as part of lease payments? How are they accounted for by the…

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Q: The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

A: GIVEN   The appropriate asset value reported in the balance sheet by the lessee for an operating…

Q: What are the required lease disclosures for the lessor and lessee?

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: The lessee normally measures the lease liability to be recorded as the:  Select one: a. Present…

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…

Q: Describe the lessee's accounting for sale-leaseback transactions.

A: Meaning:

Q: Compare the way a purchase option that is reasonably certain to be exercised and a lessee-guaranteed…

A: Definition:   Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: Describe and demonstrate how the lessor accounts for a sales-type lease with a selling profit.

A: In a sales-type lease, the lessor is assumed to actually be selling a product to the lessee, which…

Q: What discount rate should be used to evaluate a lease? Why?

A: Lease may be defined as the legal contract between two party's lessor and lessee, were one party…

Q: Compare and contrast a finance lease with an operating lease.

A: Lease:   It is an agreement between two parties where the one party agrees to rent an asset owned by…

Q: Compare the benefits and drawbacks to long-term vs. short-term leases from EITHER the point of view…

A: Lease refers to the contract between the parties in which one party agrees for renting an asset…

Q: What is the difference between a lease receivable and a net investment in the lease?

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Q: Define the term NAL as it is used in lease analysis,and then explain how the NAL is calculated.

A: Net advantage to leasing (NAL) refers to the monetary savings or the money that a company or…

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.