Under IFRS: lessees may use alternative measurement bases (e.g., revaluation accounting) for the right-of-use asset. different measurement bases may be used for the right-of-use asset but only for leases with terms less than one year. the same guidance on collectibility of the lease payments is used by lessors as in GAAP. lessors are required to defer gross profit on direct financing leases

Under IFRS: lessees may use alternative measurement bases (e.g., revaluation accounting) for the right-of-use asset. different measurement bases may be used for the right-of-use asset but only for leases with terms less than one year. the same guidance on collectibility of the lease payments is used by lessors as in GAAP. lessors are required to defer gross profit on direct financing leases

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 12Q

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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
Which of the following is false with respect to lease accounting under IFRS? IFRS require lessees to recognize a right-of-use asset and related lease liability for leases with terms longer than one year. IFRS does not include any explicit guidance on collectibility of the lease payments by lessors and amounts necessary to satisfy a residual value guarantee. IFRS does not permit recognition of selling profit on direct financing leases at lease commencement. IFRS uses essentially the same lessor accounting model as GAAP for leases classified as sales-type or operating.
All of the following are differences with respect to the accounting for leases, under IFRS and GAAP, except: IFRS has an additional lessee recognition and measurement exemption for leases of assets of low value (GAAP does not). IFRS allows alternative measurement bases for the right-of-use asset (e.g., the revaluation model). under IFRS, lessees use the same tests to determine if a lease should be classified as finance or operating. IFRS permits recognition of selling profit on direct financing leases at lease commencement.
All of the following are similarities with respect to the accounting for leases, under IFRS and GAAP, except: lessees recognize a right-of-use asset and related lease liability for leases with terms longer than one year. lessees use the same general lease classification criteria to determine if lessees classify leases as finance or operating. lessors under IFRS and GAAP use the same model to account for sales-type leases. GAAP and IFRS have similar qualitative and quantitative disclosure requirements for lessees and lessors.
When a sale-leaseback transaction occurs, if the leaseback is considered to be an operating lease, and the lease payments and sales price are at fair value, any gain on the sale a. Is amortized over the lease term by a company using IFRS. b. Is recognized immediately by a company using IFRS. c. Is amortized over the lease term by a company using either U.S. GAAP or IFRS. d. Is not recorded by a company using IFRS.
Under IFRS: lessees and lessors recognize right-of-use assets. lessees always use the operating method. lessees always recognize a right-of-use asset and lease liability for leases with terms less than one year. lessors do not distinguish between sales-type and direct financing lease
Which of the following statements is false regarding the accounting for leases? The lessor may not use the straight-line basis for recognizing lease income under an operating lease if another systematic basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. The amount of lease income recognized each year by the lessor under an operating lease is typically constant even though the contractual payments increase every year by a certain amount specified in the contract. A lessor includes initial direct costs incurred on the operating lease as part of the cost of the leased asset, and initial direct costs are to be recognized in profit or loss on the same basis as rent income is recognized. A lessor includes a rent collected in advance as part of the cost of the leased asset.
Which of the following is not one of the procedures for accounting by the lessee for a decrease in lease scope? Decrease in the right of use asset equal to that of the peso decrease in finance lease liability to reflect decrease in scope both are required accounting procedures Adjustment of the decreased finance lease liability to the present value of future lease payments both are not required accounting procedures
How should an entity account for a short-term or low-value lease under PFRS 16? Group of answer choices Recognize an discounted present value of future payments. On a straight-line basis unless the use of the asset allows for a more appropriate treatment. Recognize the expense as it is paid. The same treatment as long-term leases
If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, an entity shall make the following adjustments to measure the sale proceeds at fair value? any below-market terms shall be accounted for as a prepayment of lease payments both of the other choices either of the other choices any above-market terms shall be accounted for as additional financing provided by the buyer-lessor to the seller-lessee
Which of the following statements is correct regarding the accounting for leases? The lessee depreciates the leased asset under a “short-term” or a “low-valued asset” lease The lessor depreciates the leased asset under a finance lease An entity can never be both a lessor and a lessee of a same leased asset When discounting lease payments both the lessor and the lessee use the interest rate implicit in the lease, unless the lessee cannot determine this rate
Which of the following is incorrect regarding the accounting for leases by a lessee? A. A lessee recognizes the same total amount of expense on a lease whether it uses the general recognition or the recognition exemption under PFRS 16. B. The interest expense on a lease liability decreases each period C. According to PFRS 16, executory costs, such as insurance and real property taxes, are always excluded from lease payments regardless of whether these costs transfer goods or services to the leasee. D. A lessee shall allocate the total consideration in a contract to the lease components and non-lease components of the contract