Does the updated lease standard ci prganizations decisions about whet ease or buy equipment or real esta easing an asset under the new rule
Q: Which of the following is not included in the lease payments for the purpose of computing the lease…
A: This question deals with the IFRS 16 "Leases". When lessee lease the asset from the lessor then…
Q: Which of the following statements about purchase option is correct? a. None of the other choices…
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A: "Since you have asked multiple questions, we will be solving the first question for you. If you want…
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Q: uestion: True or False
A: Step 1 In lease accounting, in any model adopted by the lesser or lessee for its accounting of…
Q: Initial direct costs incurred by the lessor in connection with specific leasing activities as in…
A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…
Q: nd in the Who are the two parties to a lease transaction? Describe the various types of leases. What…
A: Parties to lease transaction There are two parties to a lease transaction, namely, the lessor and…
Q: Which one of these statements is correct concerning leasing arrangements? I. The debt financing used…
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Q: In computing depreciation of a right-of-use asset, the lessee should subtract O a guaranteed…
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Q: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…
A: In the given case option A is correct... Both are required accounting procedures for the decrease in…
Q: If there is a reasonable certainly that lessee will obtain ownership by the end of the lease term,…
A: Useful life of the asset or lease term, whichever is shorter
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 statements about purchase option is correct? The lessee includes its present…
A: The bargain purchase option is the right to purchase assets after the expiry of the lease term. The…
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A: Solution: As per IAS 17, "If there is no reasonable certainty that the lessee will obtain ownership…
Q: An acquired entity has a long-term operating lease for an office building used for central…
A:
Q: In calculating the amortization of a leased asset, the lessee should subtract a Select one: a.…
A: Amortization- Amortization refers to spreading payments over manifold periods. The word is used for…
Q: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…
A: procedures for accounting by the lessee for a decrease in lease scope::: Decrease in the right of…
Q: . The capitalized costs of Right-of-use Asset includes the following I. Present value of the lease…
A: The right-of-use asset, also known as an ROU asset, seems to be a lessee's power using a leased…
Q: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…
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Q: TRUE OR FALSE: in a sales type lease the net investment in the lease is credited to the appropriate…
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Q: Statement I. When the bargain purchase option was not exercised, the lessee should record a loss…
A: The answer is stated below: Note: Answering the first question as there are multiple…
Q: Which of the following statements is/are not true? Interest expense on the lease liability will…
A: PFRS 16 talks about Recognition, Classification, Measurement and Disclosure of Leases in Financial…
Q: Choose the correct. An acquired entity has a long-term operating lease for an office building used…
A: In its financial statements, the acquiring firm should report the value assigned to the lease…
Q: The buyer-lessor recognizes the asset from a sale and leaseback transaction resulting to a finance…
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A: 1.(B) TOTAL USEFUL LIFE.…
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Q: Initial direct costs incurred by the lessor under a sales-type lease should be a. Deferred and…
A: Initial direct cost refers to the cost that Related directly with the completing a lease…
Q: When a sale-leaseback transaction occurs, if the leaseback is considered to be an operating lease,…
A:
Q: The methods of accounting for a lease by the lessor are Select one: a. operating and finance lease…
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Q: The five criteria of lease classification in US GAAP do not include: A) The agreement specifies that…
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Q: The following information is provided for an equipment leased by Lessee from Lessor. Lessee and…
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Q: The initial direct costs incurred in relation to a lease transaction is added to get the right of…
A: The initial direct costs incurred in relation to a lease transaction is added to get the right of…
Q: A lessor has entered into a lease agreemen nssee to classify the lease as a capital leas collection…
A: The answer has been mentioned below. Note: Attempting the first question only. kindly…
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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.Which of the following statements is/are not true? Interest expense on the lease liability will increase the carrying amount of the liability. A lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date, using the lessee's incremental borrowing rate. Right-of-use asset cost will include an estimates cost to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Group of answer choices Only statement 2. All statements are true. Only statements 2 and 3. None of the statements are true.Which of the following statements about purchase option is correct? The lessee includes its present value on the computation of lease liability only if it is guaranteed. None of the other choices is correct. It is ignored if the leased asset reverts back to the lessor at the end of the useful life. Its present value is added to get the lease liability if it is reasonably certain that it will be exercised.
- Which of the following statements about purchase option is correct? a. None of the other choices is correct. b. Its present value is added to get the lease liability if it is reasonably certain that it will be exercised. c. it is ignored if the leased asset reverts back to the lessor at the end of the useful life. d. The lessee includes its present value on the computation of lease liability only if it is guaranteed.Which one of the following is an indicator that a lease is an operating lease for accounting purposes? Multiple Choice The lease transfers ownership of the asset to the lessee by the end of the lease term. The lessee will probably exercise the option to purchase the leased asset. The lease term represents a minor portion of the leased asset's economic life. The residual value plus the present value of the lease payments exceeds the value of the leased asset. The lessor has no use for the asset other than to lease it to the present lessee due to the specialized nature of that asset.Choose the correct. An acquired entity has a long-term operating lease for an office building used for central management. The terms of the lease are very favorable relative to current market rates. However, the lease prohibits subleasing or any other transfer of rights. In its financial statements, the acquiring firm should report the value assigned to the lease contract as:a. An intangible asset under the contractual-legal criterion.b. A part of goodwill.c. An intangible asset under the separability criterion.d. A building.
- Which of the following statements is true? Group of answer choices The right-of-use asset is increased by prepaid lease payments and the lessee's initial direct costs, but reduced by lease incentives. The right-of-use asset is increased by prepaid lease payments, but reduced by lease incentives and the lessee's initial direct costs. The right-of-use asset is reduced by the lessee's initial direct costs, but increased by lease incentives and prepaid lease payments. The right-of-use asset is reduced by prepaid lease payments and the lessee's initial direct costs, but increased by lease incentives.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 leasesWhy is lease reporting required? Justification for your answer.
- Assume a lessee leases equipment and insists on terms that qualify it as an operating lease, barely escaping the qualification as a capital lease. Discuss the impact that such an operating lease has on financial statements and related financial information as compared to the effect that a capital lease would have.If there is a reasonable certainly that lessee will obtain ownership by the end of the lease term, the depreciation of the leased asset is based on the Useful life of the asset or lease term, whichever is longer Useful life of the asset or lease term, whichever is shorter Useful life of the asset Lease termWhich 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?
