er IFRS 16, lessors are required to account for lease receipts from operation leases as a. Income, on a straight-line basis over the lease term b. Revenue, on a reducing balance basis over the lease term c. Revenue, at the end of lease term d. Income, on inception date of the lease

er IFRS 16, lessors are required to account for lease receipts from operation leases as a. Income, on a straight-line basis over the lease term b. Revenue, on a reducing balance basis over the lease term c. Revenue, at the end of lease term d. Income, on inception date of the lease

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 2RE: Use the information in RE20-1. Prepare the journal entry that Keller Corporation would make during...

See similar textbooks

Related questions

Q: A lease might specify that rental payments may be increased (or decreased) at some future time…

A: The contingent rentals are excluded from lease payments. Instead they are reported in the disclosure…

Q: 1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A lessee records a lease obligation with a credit to the obligation in the amount of . the total…

A: At the commencement date, a lessee initially measures the lease liability (obligation) at the…

Q: A lease might specify that lease payments may be increased (or decreased) at some future time during…

Q: Lease bonus paid by the lessee in a short-term lease must be accounted by * O recognizing the lease…

A: Solution : lease bonus paid by the lessee in a short term lease must be accounted by correct answer…

Q: Under the pre-2019 accounting standards, how are operating leases reported in the lessee's balance…

A: An operating lease is a contract in which the lessor, allows the lesse, to use an asset for a length…

Q: Part 1: Finance leases and operating leases are the two classifications of leases described in FASB…

A: Since the student has posted multiple requirements, we will answer only part a. Thank you. Part 1:…

Q: If title is not expected to pass to the lessee by the end of the lease term, lease of land is…

A: Operating Lease: Under an operating lease, the right to use an Asset is given by the lessor to the…

Q: If a sale and leaseback transaction results in a finance lease, any excess of sale proceeds over the…

A: Solution A lease is a contract outlining the terms under which one party agrees to rent an asset -…

Q: When a lease modification results in partial termination of a lease, the change shall be accounted…

A: Answer is option D) The increase (decrease) in lease liability as a result of the lease modification…

Q: n amount paid by the lessee to the lessor in addition to the periodic rental which is treated by the…

A: Solution: Lease bonus in addition to the lease payment are considered as unearned rent income for…

Q: In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or…

A: Initial Direct Cost means the incremental cost for obtaining a lease. The cost which would not have…

Q: Lessor Co. entered into two contract leases. Lease #1 transfers substantially all the risks and…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

Q: (Comparison of Different Types of Accounting by Lessee and Lessor)Part 1: Capital leases and…

A: Since the student has posted multiple requirements, we will answer only part a. Thank you. Part 1:…

Q: The new accounting standard for leases, AASB 16/IFRS 16, has introduced: Select one: A. a multi…

A: IFRS are a set of accounting rules that are made for financial statements of public company for…

Q: 31. In an operating lease, the lessor records Select one or more: a) Lease revenue only b)…

A: In operating lease, only the right to use assets is transferred to the lessee and the ownership of…

Q: Generally accepted accounting principles require that certain lease agreements be accounted for as…

A: Generally accepted accounting principles require that certain lease agreements be accounted for as…

Q: In a lease that is recorded as a manufacturer’s or dealer’s lease by the lessor, interest revenue…

A: Manufacturers or dealers often offer to customers the choice of either buying or leasing an asset. A…

Q: 26 If title is not expected to pass to the lessee by the end of the lease term, lease of land is…

A: Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…

Q: One of the determinative criteria for a finance lease specifies that the lease term be equal to or…

A: Solution: If lease term is 75% of economic life of leased asset, lease should be accounted for as…

Q: Which of the following is most likely a lessee’s disclosure about operating leases?A . Lease…

A: Operating lease: In operating lease ownership cannot be transferred.

Q: Leases are governed by FASB 13 whose general purposes are to: I.outline the accounting and tax…

A: Financial Accounting Standard Board - 13 According to Financial Accounting standard Board which…

Q: Rent received in advance by the lessor for an operating lease should berecognized as revenue a. when…

A: Lease is an agreement between two parties in which one party that is Lessor provides its asset for…

Q: A lessee is allowed to elect not to record a right-of-use asset and lease payable at the beginning…

A: a general statement is IFRS 16 introduces a single lessee accounting model and requires the lessee…

Q: 9. Which of the following statements is not true. (A) Capitalized leases should be reported on the…

A: A lease is a contract between a property owner and someone who wishes to use their asset. In a lease…

Q: Which one of the following would normally lead to a lease being classified as an operating lease?…

A: Solution: "At the inception date of the lease agreement, the present value of the total lease…

Q: Payments on an operating lease will appear: A. In the profit and loss account as an expense B. In…

A: Lease agreement is a type of agreement between two parties, in which one party provides its assets…

Q: . In a lease that is not classified as a manufacturer's lease, initial direct cost is a. added to…

A: Solution: As per accounting standards related to lease, Initial direct costs are often incurred in…

Q: In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or…

A: In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or…

Q: In a lease that is not assified as a manufacturer's ase, initial direct cost is * a. added to the…

A: Solution: In a lease that is not classified as a manufacturer's lease, initial direct cost is "added…

Q: Which of the following statements characterizes a sales-type lease? A)The lessor recognizes only…

A: SOLUTION- SALES TYPE LEASE IS A FINANCE LEASE IN WHICH THE FAIR MARKET VALUE (OR IF LOWER , THE PV…

Q: (4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned…

A: A lease can be referred to as an agreement in which one party, lessor, grants the right to use an…

Q: When should a lessor recognize as income a nonrefundable lease bonus paid by a lessee on signing an…

A: Solution: The receipt of the lease bonus creates deferred revenue whether refundable or non…

Q: Which statement characterizes an operating lease? The lessor records depreciation and lease…

A: Solution: Following statement characterizes finance lease: The lessee records depreciation and…

Q: On the lessor's accounting, which of the following situations would prima facie lead to a lease…

A: On the lessor’s accounting, following situations would prima facie lead to a lease contract being…

Q: ease liability measured at lease inception?

A: The lease liability is initially recognised at the commencement day and measured at an amount equal…

Q: All of the following are similarities with respect to the accounting for leases, under IFRS and…

A: International Financial Reporting Standards (IFRS): IFRS are a set of international accounting…

Q: A lease agreement whereby the lessor shall recognized gross profit at inception of the lease

A: A lease agreement whereby the lessor shall recognized gross profit at inception of the lease is…

Q: Which of the following lease-related revenue and expense items would be recorded by the lessor if…

A: A lessor is someone who rents or lease an asset without transferring the ownership rights. A lessee…

Q: The objective of IAS 17 Leases is to prescribe the appropriate accounting treatment and required…

A: When a lease is classified as a finance lease, the lessee must account for both an asset and a…

Q: Among the four types of leases: Lessor’s sales-type lease, Lessor’s operating lease Lessee’s…

A: A) Lessor's sales-type lease - Lessor will record the Lease receivable i.e. lease asset on the…

Q: In accounting for lease contracts, companies reporting under U.S. GAAP O are required to treat the…

A: ASC 842 is an accounting standard that deals with accounting of leases. Leases are two types.…

Q: n an operating lease, the lessee records interest expense. lease expense. amortization expense and…

A: Lease is one type of source of finance, where there are two parties Lessee and lessor. The person…

Q: statements is correct related to lease

A: Option "a" and "b" are incorrect because it deals with depreciation of leased asset, not lease.…

Q: g lease, the lessor recognizes a ____________ when the cumulative rental income is lower than the…

A: An operating lease is a contract that allows you to use an asset without giving up ownership of it.…

Q: 1. Under IFRS 16, which of the following statements is true? * The lessee automatically accounts the…

A: Lease is a type of contract in which the actual owner of the asset gives the right to use the asset…

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

Under IFRS 16, lessors are required to account for lease receipts from operation leases as

a. Income, on a straight-line basis over the lease term

b. Revenue, on a reducing balance basis over the lease term

c. Revenue, at the end of lease term

d. Income, on inception date of the lease

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

At its inception, the lease term of Lease G is 65% of the estimated remaining economic life of the leased property. This lease contains a purchase option that is reasonably expected to be exercised. The lessee should record Lease G as: a. neither an asset nor a liability b. an asset but not a liability c. an expense d. an asset and a liability
Use the information in RE20-1. Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.
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.
22 Lessors are required to account for lease receipts from operating leases asA. revenue, on a reducing balance over the lease term.B. income, on inception date of the lease.C. income, on a straight-line basis over the lease term.D. revenue, at the end of the lease term.
Which of the following statements is correct in accordance with AASB 16 Leases? Group of answer choices A lease contract, or part of a lease contract, conveys the right to transfer ownership of an asset for a period of time in exchange for consideration. Payments that are made by a lessee at commencement date are included in the initial amount recognised for the lease liability. Payment for executory costs reimbursed by the lessee after being paid by the lessor on behalf of the lessee are included in the calculation of lease payments. Variable lease payments may be increased or decreased during the lease term because of changes in facts and circumstances occurring after the asset is made available to the lessee to use, other than the passage of time.
Rent received in advance by the lessor for an operating lease should berecognized as revenue a. when receivedb. at the lease's inceptionc. over the lease termd. at the lease's expiration
Initially, a lease liability is measured a. by the lessee at the present value of the lease payments that are not paid at the commencement date of the lease. b. by the lessor at the present value of the total lease payments payable at the commencement date of the lease. c. by the lessor at the total cost of the right-of-use asset. d. by the lessee at the total cost of the right-of-use asset.
When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an operating lease? A. Over the lease term B. At the inception of the lease C. When received D. At the lease expiration
Which of the following statements is correct related to lease? a. The leased asset is depreciated over the asset's useful life or lease term whichever is higher. b. The leased asset is depreciated over the asset's useful life. c. The leased asset is recorded using the higher amount between fair value of the asset and present value of the minimum lease payments. d. Under IFRS 16 a lease is defined as ‘a contract that conveys the right to use an asset for a period of time in exchange for consideration'.
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.
24 In a lease that is recorded as a manufacturer’s or dealer’s lease by the lessor, interest revenue should beA. recognized in full as revenue at the lease’s inception.B. recognized over the period of the lease using the straight-line method C. recognized over the period of the lease using the interest method.D. not be recognized in the accounts.
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.