The situation which would normally lead to a lease being classified as a finance lease include all of the following, except

Q: Initially, a lease liability is measured a. by the lessee at the present value of the lease…

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

Q: Which of the following lease provisions would cause a lease to be classified as an operating lease?…

A: There are two types of lease one is operating lease and other is capital lease or financial lease.

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: If the lease in a sale-leaseback transaction meets one of the five lease tests and is therefore…

A: The leaseback agreement includes the details regarding the lease duration, lease payment, etc.'

Q: A lessor with a sales-type lease involving an unguaranteed residual value at the end of the lease…

A: A contract under which lessee gets the right to use an asset by the lessor and pays him…

Q: Which of the following describes the lease term test? If the lease term is 75% or more of the…

A: As per IFRS 16 In a finance lease  the lessor will lose the ownership of leased asset. Thus he…

Q: Lease payments are payments made by a lessee to a lessor relating to the right to use an underlying…

A: The standard states that lease payments for the lessee includes the following a.) Exercise price of…

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: 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: nitial direct costs are immediately recognized as an expense by the lessor when the cost incurred in…

A: Lease agreement is the agreement in which a person acquires the right to use the asset of other at a…

Q: Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The…

A: Answer: Option 4 - All of the above. Reason: If a lease meets one or more of the following criteria,…

Q: A lessee with a lease containing a bargain purchase option should depreciate the leased asset over…

A: A lesseewith an lease containing a bargain purchase option should depreciate the leased asset over…

Q: At the inception of a finance lease, the guaranteed residual value should be Included at present…

A: A lease is an agreement between the lessor and lessee in which the legal rights of owner and…

Q: The appropriate valuation of an operating lease in the balance sheet of the lessee is? right of use…

A: The appropriate valuation of an operating lease in the balance sheet of the lessee is Nil.... Only…

Q: Under US GAAP, a lessor’s reported revenues at lease inception will be highest if the leaseis…

A: Option A is the answer

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: hen a lease transfers ownership to the lessee by the end of the lease term, the underlying asset is…

A: Solution: As per IAS 17, "If there is no reasonable certainty that the lessee will obtain ownership…

Q: For a lease that transfers ownership of the property to the lessee by the end of the lease term, the…

A: Lease represents the agreement among two parties known as lessee and lessor where the lessor…

Q: Gross investment in the lease is equal to    a. Sum of the lease payments receivable by a lessor…

A: Solution Concept Gross investment in the lease =minimum lease payment + unguaranteed residual value…

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: When a lease qualifies as a finance lease, what amount is initially recorded as the cost of the…

A: Solution Concept In case of finance lease , The initial cost of right of use asset include…

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: The difference of gross investment in the lease and net investment in the lease of the lessor is?…

A: Solution: Gross investment in lease: The sum of 1. The lease payments receivable by a lessor under a…

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: 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: 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: 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: 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: 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: In a sale-leaseback transaction, the lease liability is equals to: A. PV of lease payments accruing…

A: Sale and leaseback transaction refers to the transaction where the asset is first sold by the seller…

Q: Occasionally, a lease agreement includes a guarantee by the lessee that the lessor will recover a…

A:

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: 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: statements is correct related to lease

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

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: If a lease term is more than 80% of the asset’s life and the leased property is transferred from the…

A: Answer: The given statement is True.

Q: Under a direct financing lease, the excess of aggregate rentals over the cost of the leased property…

A: Solution: Under a direct financing lease, the excess of aggregate rentals over the cost of the…

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

A: Solution: On the lessor’s accounting, following situations would prima facie leas to a lease…

Q: The five criteria of lease classification in US GAAP do not include: A) The agreement specifies that…

A: Answer) option B The present value of the lease payments exceeds half of the fair value of the…

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…

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…

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.