In a finance lease by the lessee, the leased asset is depreciated on a systematic basis consistent with the depreciation policy of the lessee. If the the lease is only for a short term and of low value, and the lease contract did not mention as to the classification of such lease nor did it contain transfer of ownership and a reasonable certainty as to the purchase option's exercisability, depreciation by the lessee is      a. Based on the useful life of the leased asset. b. Based on the lease term. c. Based on the shorter of the lease term or the useful life of the asset. d. Not recognized since the lease is an operating lease and the depreciation expense shall be shouldered by the lessor who retains ownership of the leased asset.

Q: The lease of land and building when split causes difficulty in the allocation of the lease payments.…

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

Q: Asnwer true or false  In a sale and leaseback transaction that qualifies as a sale under PFRS 16,…

A: "Since you have asked multiple questions, we will be solving the first question for you. If you want…

Q: The lessee recognizes a loss on finance lease when the fair value of the leased asset is _______…

A: Solution: When at the end of lease term, fair value of leased asset is lesser than the guaranteed…

Q: Answer True or False Initial direct costs are immediately recognized as an expense by the lessor…

A: Per Per PFRS 16 Inidial direct cost are the incremental cost of obtaining a lease that would not…

Q: The situation which would normally lead to a lease being classified as a finance lease include all…

A: Lease contract can be defined as an agreement between two parties, lessor and lessee. It is contract…

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: What is the theoretical basis for the accounting standard that requires certain long-term leases to…

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

Q: In computing depreciation of a right-of-use asset, the lessee should subtract O a guaranteed…

A: The answer is option (a.) [ i.e, A gauranteed residual value & depreciate over the term of the…

Q: Guaranteed residual value is a fixed amount required by the lessor at the termination of the lease…

A: Guaranteed Residual Value: It is the Value which is guaranteed by the lessee to the lessor at the…

Q: Answer True or False   Both finance and operating leases are subject to capitalization.

A: Finance Lease : lease where substantially all risk and rewards incidental to the ownership of the…

Q: xplicitly identified in the contract, it means that: a. the identified asset is never mentioned in…

A: When the asset is implicitly identified, this means asset is implied but is not directly expressed.…

Q: One of the following statements is false:      a. If the underlying asset will not revert to the…

A: A lease is a contract which provides the right to use an asset for consideration for a specified…

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: The residual value is the estimated fair value of the leased property at the end of the lease term.…

A: Finance lease is also known as capital lease.This is a long term lease agreement in which the lessee…

Q: Explain how an entity would initially and subsequently measure its right-of-use asset and lease…

A: Lease Liability: Initial measurement: The Lease Liability is initially measured at the present…

Q: If the fair value of the consideration for the sale of an asset does not equal the fair value of the…

A: If the fair value of the consideration for the sale of an asset does not equal the fair value of the…

Q: In computing amortization of a leased asset where there is no bargain purchase option, the lessee…

A: Lease An arrangement is considered to give control over the use of an asset when the lessee has…

Q: Which of the following statements are false under a sale a leaseback transaction? I. If a sale and…

A: In the given case Option II only is the incorrect and False Statement.... If the sale price is…

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

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

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: Differentiate between an operating lease, acapital (or financial) lease, and a sale andleaseback…

A: Answer: The term operating lease would be significantly shorter than the rented asset’s life. And in…

Q: The lessor recognizes a loss on finance lease when the fair value of the leased asset is _______…

A: Correct option is A. Lower; guaranteed   Explanation:

Q: In finance lease, the amount recorded as asset is the lower amount between: a. the fair value and…

A: Lease is a contract between two parties in which one party provides its asset for use to another…

Q: Which of the following items would not be included in the calculation of the lease liability for a…

A: Finance lease is the lease where lessee has operation control as well as share of economic risk and…

Q: A lease agreement will qualify as a finance lease if one of these conditions occur: A. The lessee…

A: Lease: It can be defined as a contractual agreement where one party known as lessor grants the right…

Q: In relation to a short-term operating lease, which of the following statements is NOT correct? a.…

A: A short-term operating lease is a short-term lease agreement under which the lessor rents the asset…

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

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

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: If the gains or losses from the fluctuation in the fair value of the residual accrue to the lessor,…

A: Lease accounting is the accounting to adjust the transaction where a fixed asset is taken on rent…

Q: For a lessor, the leased asset appears on the balance sheet and continues to be depreciatedwhen the…

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

A: In a sale and leaseback transaction, what is used by the buyer-lessor to depreciate the cost of the…

Q: Guaranteed residual value is a fixed amount required by the lessor at the termination of the lease…

A: Guaranteed Residual value is the value of the asset which has been given on the lease to the lessee…

Q: he lessor recognizes a loss on finance lease when the fair value of the leased asset is _______ than…

A: Solution: The lessor recognizes a loss on finance lease when the fair value of the leased asset is…

Q: Under ASC 842 If the present value of the lease payments is less than or equal to the fair value of…

A: A lease is a contract in which one party agrees to rent an asset owned by another party on certain…

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: Which of the following statements is correct regarding the accounting for leases? The lessee…

A: SOLUTION   A LEASE IS A CONTRACT OUTLINING TERMS UNDER WHICH ONE PARTY AGREES TO RENT AN ASSET - IN…

Q: Which of the following are normal characteristics of a financial lease? I. Maintenance of the leased…

A: In a financial lease an entity (lesser) borrows an asset for a considerably long period of time…

Q: When a lessee makes periodic cash payments for a finance lease, which of the following accounts is…

A: A lease is a contractual arrangement, whereby one party  (i.e., owner of the asset - Lessor ) grants…

Q: In our Anderson Company example, we assumed that the lease could notbe canceled. What effect would a…

A: Lease: It is renting out an asset to the borrower for a specified time on which lease payments or…

Q: What is the treatment of an unguaranteed residual value in determining the cost of sales under a…

A: Lease is an agreement between to two parties where one party provide plant and machinery to second…

Q: There are two parties in any lease contract—the lessee and the lessor. To a lessor, a lease analysis…

A: The step involved will be: Determining the lease payments minus income taxes and any expenses…

Q: An increase in interest income recognized for the period on a lease agreement will have the effect…

A: The amount of interest received during a certain time period is referred to as interest income. It…

Q: lessee, the leased asset is depreciated on a systematic basis consistent with the depreciation…

A: The question is related to Accounting for Lease. The operating lease is a contract that allows for…

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.