International Financial Reporting Standards
They are commonly known as IFRS. It is a set of accounting standards which are developed by independent (Non-profit) organization called as International Accounting Standards Board (IASB). It is universally accepted set of standards which states the rules and practice for accounting practice.
Financial Accounting Standards Board
It is commonly known as FASB. It is a private, non-profit organization which is a standard setting body. The main purpose of the FASB is to create and improve GAAP (Generally Accepted Accounting Principles) within the US. GAAP is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies.
To Explain: if finance lease under IFRS can be classified as an operating lease under U.S. GAAP
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- 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.arrow_forwardUnder US GAAP, a lessor’s reported revenues at lease inception will be highest if the leaseis classifi ed as:A . a sales-type lease.B . an operating lease.C . a direct fi nancing lease.arrow_forwardWhy are compound interest concepts appropriate and applicable in accounting for a sales-type lease?arrow_forward
- What is the basic difference between the accounting procedures used by a lessor for a sales-type lease and those used for a direct-financing lease?arrow_forwardWhat information should a lessee disclose about its capital leases in its financial statements and footnotes?arrow_forwardIFRS 16 states that lessors shall recognize assets held under finance lease as a receivable at an amount equal to the gross investment in the lease. * True or false?arrow_forward
- Which of the following is true regarding IFRS 16? a. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the net investment in the lease. b. Lessors shall recognize assets held under a contract of lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease. c. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the net investment in the lease. d. Lessors shall recognize assets held under a finance lease as a receivable at an amount equal to the cost of the asset which is the subject of the lease less any initial direct cost paid by the lessor.arrow_forwardBriefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for leases.arrow_forwardWhere can we obtain reliable guidelines on IFRS lease accounting?arrow_forward
- Describe the qualitative and quantitative lease disclosure?arrow_forwardFor companies that prepare their financial statements in accordance with both U.S. GAAP and IFRS, a lease is deemed to be a capital lease (usually called a finance lease under IFRS) if substantially all risks and rewards of ownership are transferred. In making this distinction, less judgment, more specificity is applied using a. IFRS. b. U.S. GAAP. c. Either U.S. GAAP or IFRS. d. Neither U.S. GAAP nor IFRS.arrow_forwardHow 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 leasesarrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning