What factors might cause the highest and best use of real estate to change during the course of a typical lease term?

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: List the sequence of events for the lessee that leads to a lease arrangement.

A: The legal agreement where there are two parties, one party convinces his property to another party…

Q: uestion: True or False

A: Step 1 In lease accounting, in any model adopted by the lesser or lessee for its accounting of…

Q: Why we will have a residual value in an operating lease?

A: Residual value is an estimated value of the asset at the end of lease term. In operating lease, we…

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

A:

Q: Why should investors be concerned about market rents if they are purchasing a property subject to…

A: Lease is an agreement by which one party agrees to use the property such as land or building of…

Q: What is a “per procedure” lease and how does it differ from a standard lease?

A: A lease is the written agreement between the two parties in which one transfers the asset to the…

Q: Explain the impact on lease accounting of uncertainties, including uncertain lease terms, variable…

A: Uncertainties in lease transactions: There are several issues with respect to lease transactions…

Q: Explain Lease Renewal Options and REIT Rent Growth?

A: Answer: Lease renewal option: A renewal option allows a lease to apply for a definite time period,…

Q: what is the value of the lease?

A: Value of Perpetual annuity = PMT/r PMT is the monthly payment r is the monthly compounded rate.…

Q: What does the present value of the residual value of a lease asset is called? Describe about it in…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

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 are the guidelines for determining when a material amount of land is involved in a lease?

A:

Q: Why the lease is considered a “short-term lease”?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: What is the difference between a tax-oriented lease and a nontax-oriented lease?

A: A tax-oriented lease: A tax-oriented lease, occasionally named a true lease, which offer the lessor…

Q: Describe the qualitative and quantitative lease disclosure?

A:

Q: What is the balance of the lease after the first lease payment?

A: Annual Payments : $30,000. Lease Terms: 12 years  Implicit Interest rate : 8% Present Value :…

Q: Write down what is the Composition of Lease Term?

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

Q: when evaluating a tenant and a lease proposal, the owner considers it?

A: Lease is an agreement where landlord and tenant agrees to certain terms and conditions. In this…

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: Explain the impact on lease accounting of other payments, including nonleasepayments, initial direct…

A: Uncertainties in lease transactions: There are several issues with respect to lease transactions…

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: 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 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 is meant by “loss to lease”? Explain?

A: Loss to lease: It is the term used in Real Estate in leasing of property mainly apartment complexes,…

Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

A: The lessor’s discount rate is the effective interest rate when determining the present value of…

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: What is the composition of lease Payments?

A: Lease is a kind of monthly rental payment made by the lessee to the lessor in return of the right to…

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 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: Why does a finance lease is economically similar to a purchase of the asset?

A: There are many similarities between purchase of a asset and Finance lease, such as: In a finance…

Q: What factors would tend to affect the value of a lease?

A: Lease is a contract between two parties in which one party lends its property or asset to the other…

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: What discount rate should be used to evaluate a lease? Why?

A: Lease may be defined as the legal contract between two party's lessor and lessee, were one party…

Q: What if Lease Terms are Modified?

A: Lease terms is a contractual agreement or obligation that is prepared and signed by both lessor and…

Q: What is lease assignment? What is subletting? Explain at least one main difference between these…

A: In the world of finance in general and letting out of properties in particular the concepts of lease…

Q: Define the term NAL as it is used in lease analysis,and then explain how the NAL is calculated.

A: Net advantage to leasing (NAL) refers to the monetary savings or the money that a company or…

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…

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.