1. The right-of-use asset shall be initially recognized at cost, which shall be comprise of the following except: a. initial direct costs incurred by the lessee. b. present value of lease payments not yet paid at commencement. c. lease payments made to the lessor at or after commencement date, less any lease incentive received. d. any estimated costs for dismantling and removing the asset, or restoring the site on which the asset is located or restoring the underlying site on which the asset is required by the terms of the lease, to the extent that the lessee incurs an obligation for those costs.
1. The right-of-use asset shall be initially recognized at cost, which shall be comprise of the following except: a. initial direct costs incurred by the lessee. b. present value of lease payments not yet paid at commencement. c. lease payments made to the lessor at or after commencement date, less any lease incentive received. d. any estimated costs for dismantling and removing the asset, or restoring the site on which the asset is located or restoring the underlying site on which the asset is required by the terms of the lease, to the extent that the lessee incurs an obligation for those costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. The right-of-use asset shall be initially recognized at cost, which shall be comprise of the following except:
a. initial direct costs incurred by the lessee.
b. present value of lease payments not yet paid at commencement.
c. lease payments made to the lessor at or after commencement date, less any lease incentive received.
d. any estimated costs for dismantling and removing the asset, or restoring the site on which the asset is located or restoring the underlying site on which the asset is required by the terms of the lease, to the extent that the lessee incurs an obligation for those costs.
2. The primary difference between a direct finance lease and a dealer’s lease is the
a. recognition of the manufacturer’s or dealer’s profit at the inception of the lease.
b. manner in which rental receipts are recorded as rental income.
c. amount of depreciation recorded each year by the lessor.
d. allocation of initial direct costs by the lessor to periods benefited by the lease arrangements.
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