When are initial direct costs recognized in an operating lease? In a sales-type lease with selling profit? In a salestype lease with no selling profit? Why?

Q: Of what significance is (a) an unguaranteed and (b) a guaranteed residual value in the lessor's…

A: The amount to be recovered by the lessor is the same whether the residual value is guaranteed or…

Q: Answer True or False Initial direct costs are immediately recognized as an expense by the lessor…

A: Per Per PFRS 16 Inidial direct cost are the incremental cost of obtaining a lease that would not…

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: Initial direct costs incurred by the lessor in connection with specific leasing activities as in…

A: Solution: Initial direct costs incurred by the lessor in connection with specific leasing activities…

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

A:

Q: A lease that transfers substantially all the risks and rewards incidental to ownership of an…

A: A lease is normally called as finance lease if any of the following conditions are satisfied, The…

Q: 1. Which statement is incorrect about initial direct costs? a. Initial direct costs incurred by the…

A: Initial direct costs are incremental cost of a lease that would not have been incurred if lease has…

Q: In accounting for a finance lease/sales-type lease, how are the lessee’s and lessor’s income…

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Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

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: What do we mean by overage in a retail lease agreement? How might it be calculated?

A: Overage on retail lease contract and its computation as follows: Retail lease contracts show a least…

Q: When a lessor receives cash on a sales-type lease, which of the following accounts is decreased? A.…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS    When a lessor receives cash on a sales-type lease,…

Q: Compared to using a fi nance lease, a lessee that makes use of an operating lease will mostlikely…

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

Q: Which one of the following accurately describes an aspect /aspects of a leveraged lease? I. The…

A: The question is related to the Leveraged Lease. In a leveraged lease, the lessor invests some money…

Q: In a lease contract, a zone of agreement exists when O NPV of Lease is greater than NPV of Buy…

A: The term lease contract refers to the contract between two parties in which one party allows another…

Q: Which one of the following definitions is/are correct? I. A lease between a lessor and the…

A: 1) Incorrect: Direct lease is the lease between manufacture or dealer(which is lessor) and user…

Q: What are the benefits to lessees of operating lease accounting?

A: Operating lease: The operating lease refers to the contract between two parties where one party…

Q: When both the gross investment and cost of the leased asset is equal for both direct and sales-type…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

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: initial direct costs incurred in relation to a lease transaction is added to A)the cost of sales…

A: In lease accounting the initial costs directly incurred in a lease transaction are to be considered…

Q: What is selling profit on a sales-type lease? How do we account for a sales-type lease with a…

A: Sales-type lease: Sales type lease in equivalent type of direct financing whereby the owner (lessor)…

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: . In a lease that is not classified as a manufacturer's lease, initial direct cost is  a. added to…

A: Solution: As per accounting standards related to lease, Initial direct costs are often incurred in…

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 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 are initial direct costs recognized in an operating lease? In a direct financing lease? In a…

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Q: What nonlease costs might be included as part of lease payments? How are they accounted for by the…

A:

Q: In a lease that is not assified as a manufacturer's ase, initial direct cost is * a. added to the…

A: Solution: In a lease that is not classified as a manufacturer's lease, initial direct cost is "added…

Q: TRUE OR FALSE: in a sales type lease the net investment in the lease is credited to the appropriate…

A: Lease is a financial transaction where one party, the lessor leases his asset to another party…

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: lease

A: What is the treatment of unguaranteed residual value in determining the cost of sales under a sales…

Q: A lease that involves a manufacturer’s or dealer’s profit is a(an):(a) direct financing lease.(b)…

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

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: .The initial direct costs of leasing * , O All of these answers are true with regard to the initial…

A: Initial direct cost of leasing:- It is the cost which is generally incurred by the lessor in…

Q: Net investment in a sales-type lease is equal to

A: Net investment in sales type lease is recognized by lessor as amount of lease receivable. Option (a)…

Q: Net investment in a sales-type lease is equal to Gross investment less unearned financing revenue…

A: Sales-type lease is a type of lease where the lessor is assumed to sell the property to lessee.…

Q: Which of the following is true about lease incentives? a. It forms part of the lease liability and…

A: The question is related to Accounting for Lease. As per IFRS 16 Lease incentives are payments made…

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: 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: The initial direct costs incurred in relation to a lease transaction is added to get the right of…

A: The initial direct costs incurred in relation to a lease transaction is added to get the right of…

Q: When both the gross investment and cost of the leased asset is equal for both direct and sales-type…

A: A lease is a contractual agreement between two parties wherein the lessor (owner) provides the right…

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.