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

Q: What is a purchase option? How does it affect accounting for a lease?

A: Purchase option : A purchase option is an agreement that gives the lessee a choice to purchase the…

Q: Discuss how the lease liability would be measured at lease inception.

A: Lease Liability is the present value of the financial obligation of the lease for the lease…

Q: How does the existence of leasehold improvements can affect the determination of the lease term?

A: Leasehold Improvements are referred to as any of the changes or improvements made to the rental…

Q: Outline the accounting procedures involved in applyingthe capital lease method by a lessee.

A:

Q: Discuss the accounting and reporting for special features of lease arrangements.

A: Special features of lease arrangements: - Residual type- Sale type leases- Bargain purchase option-…

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: Describe the accounting processes that a lessee must follow while using the operational lease method

A: Here is the Answer :

Q: Describe the accounting and reporting for special features of lease arrangements.

A: Special features of lease arrangements: - Residual type - Sale type leases - Bargain purchase option…

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

A:

Q: Where can authoritative IFRS related to the accounting for leases be found?

A: Accounting changes include the change in methods or ways of accounting by the company, which will…

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: 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: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

Q: At the beginning of a Type B lease, the lessor will record what asset and liability, if any?

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: When can a lease create both an asset and a liability for the lessee?

A: Lease is an agreement between two persons in which one grants the right to another to use a…

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: Why is lease reporting required? Justification for your answer.

A: A lease is an arrangement in which an asset is rented out, and the Lessor gets a rental payment in…

Q: The basic concept of “substance over form” influences lease accounting. Explain

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

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: Is there a need to amortize deferred rent income/unearned rent income in an operating lease?

A: There are two type of lease which are, (1) Operating lease  (2) Finance lease In operating lease,…

Q: In accounting for a Type B lease, how are the lessee’s and lessor’s income statements affected?

A: When accounting for finance lease/ Sales type lease, lease payments are made during the term of…

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: What are some lease provisions that would cause a lease to beclassified as a non-tax-oriented lease?

A: Lease: A type of contract where one party gives property, land, or services to another party for the…

Q: Describe the accounting procedures involved in applying the finance lease method by a lessee.

A: A lease is a written agrfgdhdfA lease is a written agreement that indicating the conditions within…

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

A:

Q: At the beginning of a Type B lease, the lessee will record what asset and liability, if any?

A: Type B lease implies to the lease in which insignificant portion of the useful life of the asset is…

Q: Where can we find authoritative guidance for accounting for leases under IFRS?

A: International Financial Reporting Standards:   IFRS (International Financial Reporting Standards) is…

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 disclosures should be made by lessees and lessors related to future lease payments?

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

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: Describe the accounting for leases by lessees.

A: Finance lease is a lease where all the risks and the rewards are transferred from the lessor to the…

Q: What is the difference between an operating lease and a financial,or capital, lease?

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

Q: What are the ways in which the accounting for the lease is affected?

A: Leases are a special item in accounting. There are mainly 2 types of lease: 1. Operating and 2.…

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: Outline the accounting procedures involved in applying the operating lease method by a lessee.

A: Operational lease method: A process of using the asset for a rental payable in installments ir in…

Q: In accounting for an operating lease, how are the lessee’s and lessor’s income statements affected?

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

Q: What is the main purpose of the lease disclosures required of the lessor and lessee?

A: The Answer:

Q: At the beginning of an operating lease, the lessor will record what asset or assets, if any?

A: An operating lease is a contract that allows for the use of an asset but does not convey ownership…

Q: How do the lessee and lessor will agree to modify the terms of a lease before the lease term ends?

A: Lease Agreement:   It is a contract between the owner of an asset (lessor) and a tenant (lessee) for…

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 is a short-term lease? Describe lessee accounting for a short-term lease.

A: Short-term LeaseThis is a type of leasing which has a maximum lease term ranging from 1 year or…

Q: Where does the operating lease liability reported?

A: Operating lease: This type of lease refers to the lease where the lessor permits the lessee to make…

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.