What is the reason for excluding variable lease payments from the measurement of the lessee’s lease liability and the lessor’s receivable?

Q: A lease might specify that rental payments may be increased (or decreased) at some future time…

A: The contingent rentals are excluded from lease payments. Instead they are reported in the disclosure…

Q: Which of the following is not included in the lease payments for the purpose of computing the lease…

A: This question deals with the IFRS 16 "Leases". When lessee lease the asset from the lessor then…

Q: Which of the following does not affect the computation of the rental income/expense under an…

A: Security deposits does not affect the computation of the rental income/expense under an operating…

Q: 3. Which of the following is true in regards to the reassessment of the lease term? A. If the lessee…

A: Lease term is the time period agreed by the lessee and the lessor for which the asset shall be…

Q: Which of the following is not a criterion for a lease to be recorded as a finance lease?(a) There is…

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

Q: Describe and demonstrate how the lessee accounts for a finance lease and the lessor accounts for a…

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Q: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

Q: A lessee records a lease obligation with a credit to the obligation in the amount of . the total…

A: At the commencement date, a lessee initially measures the lease liability (obligation) at the…

Q: In a Type A lease, “front loading” of lease expense and lease revenue occurs. What does this mean,…

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

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

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Q: A lease might specify that lease payments may be increased (or decreased) at some future time during…

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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: Which of the following payment/s is/are included along with lease liability?   a- All of them b-…

A: According to IAS 17, LEASES, There are two types of Leases: 1. Finance Lease 2. Operating Lease

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: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. 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: When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an…

A: A non-refundable lease bonus paid by a lessee on signing an operating lease is treated as deferred…

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: Would using a higher discount rate increase or decrease the amount of lease liability recorded?

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Lease bonus is recognized by the lessor as a liability amortized over the lease term. * True or…

A: Introduction:- A lease defined as where one party provide or gives right to use a property to…

Q: What is difference between lease method and installment method?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where 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: Lease bonus is recognized by the lessor as

A: Lease bonus is an amount paid by the lessee to lessor for the usage of the premises or land that…

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: It is that portion of the lease payments that is not fixed in amount but is based on a factor other…

A: Contingent rent is considered as a rental payment that varies with the future amount which is not…

Q: Which of the following statements is true about initial direct costs? A. Initial direct costs of a…

A: According to the Generally Accepted Accounting Principle, initial direct cost is defined as the…

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: How may the use of leases shift the risk of rising expenses from the lessor to the lessee?

A: A lease may be defined as a contract outlining the terms under which one party agrees to rent…

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

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: How do you think expense stops and CPI adjustments in leases affect the riskiness of the lease from…

A: INTRODUCTIONLease is a contract in which the right to use the asset is given by the lessor to the…

Q: In a financing lease, “front loading” of lease expense and lease revenue occurs. What does this…

A: Finance lease: Finance lease is a parallel type of direct financing whereby the owner (lessor)…

Q: Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?

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

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: 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: The basic difference between a direct-financing lease and a sales-type lease is the recognition of…

A: A direct financing lease is a type of lease under which the lessor purchases the asset and lease it…

Q: When should a lessor recognize as income a nonrefundable lease bonus paid by a lessee on signing an…

A: Solution: The receipt of the lease bonus creates deferred revenue whether refundable or non…

Q: Describe and demonstrate how the lessor accounts for a sales-type lease with a selling profit.

A: In a sales-type lease, the lessor is assumed to actually be selling a product to the lessee, which…

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

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Q: Which of the following statements regarding the calculation of the lessee's amortization expense for…

A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…

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…

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.