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

Q: Of what significance is (a) an unguaranteed and (b) a guaranteed residual value in the lessor's…

A: The amount to be recovered by the lessor is the same whether the residual value is guaranteed or…

Q: Which are the terms may be included in lease agreements, elements that are commonly included in many…

A: A lease is the commitment to purchase an asset by providing rental payments to the lessor.

Q: A lessee should classify a lease transaction as a finance 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: Describe how a "bargain buy option" affects the lessee's accounting for a finance lease deal.

A: HERE IS THE ANSWER:

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: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

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

A:

Q: How does a leveraged lease differ from a nonleveraged lease?

A: A leveraged lease is an agreement that is partially financed by the third party creditor. In this…

Q: What is the primary objective of the required lease disclosures for the lessor and lessee?

A:

Q: Why would a lease include a contingent payment provision? Explain.

A: Contingency payment provisions is a provision for a possible event or circumstance which is not…

Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

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: 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: 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: Explain the nature, economic substance, and advantages of lease transactions.

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

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: Differentiate and compare similarities of the two classification of lessor accounting for finance…

A: Solution Definition - Finance lease is when the financing institution holds the legal ownership of…

Q: distinguish between a fi nance lease and an operating lease from the perspectives of the lessorand…

A: Difference between a finance lease and an operating lease from the perspectives of the lessorand the…

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: Identify the lease classifications for lessors and the criteria that must be met for each…

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Describe the accounting for leases by lessors.

A: There are mainly 2 types of lease:   1. Finance and 2. Operating    Finance lease is a lease where…

Q: Explain Nonlease Components of Lease Payments.

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

Q: Why do we need to differentiate lessor accounting for direct financing lease and sales-type lease?

A: Lease contract: Lease contract is an arrangement occurs between two individuals or entities through…

Q: Describe what if Lease Terms are modified?

A: Lease Terms are the terms on which both lessor and lessee agrees to enter into a specific lease. It…

Q: What are the primary benefits to a lessor of entering into a lease arrangement

A: The primary benefits to a lessor of entering into a lease arrangement will be explained:

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 Remeasurement of the Lease Liability...

A: Lease Liability:  In order to determine the lease liability, lease payment information should be…

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: Compare the way a bargain purchase option and a residual value are treated by the lessee when…

A:

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 accounting for a Type A lease, how are the lessee’s and lessor’s income statements affected?

A: To state: how the lessee’s and lessor’s income statements are affected by finance lease/sales-type…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

Q: What is meant by Non-Cancellable lease?

A: Lease: It is an agreement between two parties in which one party agrees to give an asset on lease…

Q: Outline the accounting processes that must be followed by a lessee when using the operational lease…

A: The question deals with the accounting processes that must be followed by a lessee when using the…

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

A:

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

A:

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: A lease that involves a manufacturer’s or dealer’s profit is a(an):(a) direct financing lease.(b)…

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 the lessor's accounting for a direct financing lease.

A: Direct finance leasing: An agreement created between the nonmanufacturer and a lessee who use the…

Q: Distinguish between a financing lease and an operational lease from the lessee's standpoint.

A: Financial lease is the arrangement where lessor provides lessee, a asset to use for the major period…

Q: What are executory costs? How are they accounted for by the lessee in a capital lease when paid by…

A: Executory costs are the costs related with ownership of an asset which includes maintenance…

Q: Explain the differences in revenue recognition for the lessor in a sales-type lease, a direct…

A: (a) Sale-type lease: Under this, revenue is recognized at the beginning of the lease. If the…

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.