A lessee should classify a lease transaction as a finance lease if it is noncancelable and one or more of the five classification criteria are met. Otherwise, it is an operating lease. What are these criteria and why would a  company would choose to lease an asset versus purchasing?

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: Explain why companies frequently choose to lease assets and describe the basis for each of the…

A: Lease   Lease payment is the equivalent of the monthly rent, that is formally dictated under a…

Q: For the lessor to account for a lease as a sales-type lease, the lease must meet:

A: A sales-type lease assumes that the lease serves as a transfer of property to the customer, or…

Q: Want to the answer

A: Step 1: Definition of Lease:A lease can be explained as a contract between two parties in which one…

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: Describe the effect of a “bargain-purchase option” onaccounting for a capital lease transaction by a…

A:

Q: Which of the following statements is most CORRECT? Oa. A key difference between a capital lease and…

A: A lease is a legal agreement in which one party gives another party the use of real estate or land…

Q: Describe the accounting procedures that must be followed by a lessee when employing the operational…

A: The Question is about the accounting procedures that must be followed by a lessee when employing the…

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

A:

Q: Under ASPE, the lessor is required to expense any direct costs associated with a lease up front.…

A: Accounting Standards for Private Enterprises Accounting Standards for Private Enterprises is an…

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: 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: Which one of these statements is correct concerning leasing arrangements? I. The debt financing used…

A: 1) Incorrect: It is the debt of lessor and not the lessee. The lessor will get the title of assets…

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: f the lessor meets any one of the five Group I criteria, then the lessor classifies the lease as…

A: The question is asking us to identify the type of lease based on the criteria met by the lessor. In…

Q: What situations cause us to remeasure a lease liability and right-of-use asset How is that…

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

Q: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

Q: ) If a lease does not qualify as an operating lease, how will a lessee classify the lease? (1. Short…

A: A lease is a contractual agreement between two parties, the lessor (owner) and the lessee (user),…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

Q: Risks and benefits of ownership transfer to the lessee with an operating lease. true false

A: Under an operating lease, ownership risks and benefits are not transferred to the lessee.

Q: Why is the reporting of leases required? Justify your response.

A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in return.…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

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: Differentiate between an operating lease, acapital (or financial) lease, and a sale andleaseback…

A: Answer: The term operating lease would be significantly shorter than the rented asset’s life. And in…

Q: distinguish between a fi nance lease and an operating lease from the perspectives of the lessorand…

A: Difference between a finance lease and an operating lease from the perspectives of the lessorand the…

Q: If a lease does not transfer control of the asset over the lease term, the lessor will generally…

A: Sales-type lease enables the renter to use an asset temporarily while accounting for it as sold…

Q: ect of an operating lease on the income distribution schedule: a. is non-existent. b. affects…

A: Lease - Contracts or documents that transfer property from one party to another for a predetermined…

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 some lease provisions that would cause a lease to beclassified as a non-tax-oriented lease?

A: Lease: A type of contract where one party gives property, land, or services to another party for the…

Q: What are the criteria for classifying a lease as operating or capital? Why is there a difference…

A: Criteria for classifying a lease as operating or capital: There are five different types of leasing…

Q: Why do we need to differentiate lessor accounting for direct financing lease and sales-type lease?

A: Lease contract: Lease contract is an arrangement occurs between two individuals or entities through…

Q: is the basic concept of “substance over form” influences lease accounting? Explain.

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

Q: Explain the concept of accounting for leases and the criteria used to determine whether a lease…

A: Accounting for leases involves recognizing and recording lease transactions in a company's financial…

Q: Explain the distinction between a direct-financing leaseand a sales-type lease for a lessor.

A:

Q: What are the differences between a direct-financing and a sales-type lease for a lessor? Why would a…

A: First of all, let us understand the concepts of lessor and lessee. So essentially, a lessor is de…

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.