All of the following are benefits of leasing except:Problem 5a.They have the ability to shift the tax benefits from depreciation and other deductions froma lessee that has little or no taxable income to a lessor that has substantial taxable income.They provide flexibility to change capacity as needed without having to purchase or sellassets.b.c.d.They have the ability to reduce the risk of technological obsolescence, relative to outrightownership, by maintaining the flexibility to shift to technologically more advanced assets.In an operating lease, the lessee recognizes the signing of the lease as the simultaneousacquisition of a long-term asset and the incurring of a long-term liability for leasepayments.

An agreement of contract that is prepared to transfer the right to use the resources for a…

Answered: All of the following are benefits of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bonus depreciation reduces the adjusted basis of property in the same manner that regular MACRS depreciation does. True or false.
A lease is an agreement in which the lessor conveys the right to use an asset for an agreed period of time to the lessee in return for a payment or series of payments (IAS 17.4). Because of rapid changes in technologies, most of the production companies involve in the lease contracts rather than of purchasing new machineries. Being the accounting specialization student, how will you support this? Explain any three advantages of this contract with suitable examples.
94 2. According to the revised Conceptual Framework, the asset is a right, while the liability is the obligation, rather than ultimate inflows or outflows of economic benefits resultin from the asset or liability. 3. Legal enforceability of a right, for example ownership necessary for control over an economic resource to exist 4. According to the revised Conceptual Framework, an asset exist even if the probability that it will provide inflows future economic benefits is low, and even if the asset is subie to a high measurement uncertainty. 5. According to the revised Conceptual Framework, what the entin controls is the right, and not the ultimate inflows of futu economic benefits that the economic resource may produce. 6. The Conceptual Framework defines income and expenses in terms of changes in assets and liabilities. 7. Not all items that meet the definition of a financial statement element are recognized; they are recognized only if recognizing them will also result in relevant and…
In the lease versus buy decision, leasing is often preferable Oa. because the lessee may have greater flexibility in abandoning the project in which the leased property is used than if the lessee bought and owned the asset. Ob. because, generally, no down payment is required, and there are no indirect interest costs. Oc. because it has no effect on the firm's ability to borrow to make other investments. Od. because the lessee owns the property at the end of the least term. Oe. because lease obligations do not affect the firm's risk as seen by investors.
Insurance value differs from market value in that? a) the value is only attributed to the replacement value of the structure b) includes the land and structure values c) fair market value is not insurable d) it includes only the land value
A company can either purchase or lease an asset. When comparing the two alternatives, which of the following is not an advantage of buying and financing the asset? (a) the possibility of receiving an investment tax credit (b) Obtaining a tax deduction for the depreciation expense (c) The potential of the asset to appreciate in value (d) Improved financial leverage
What would be the advantages and disadvantages of leasing assets instead of owning them? How would the financial statements be different in a leasing situation (for both operating leases and finance leases) for the lessee? What about the lessor (including all of the types)? What disclosures should be made by lessees and lessors related to future lease payments?
How does Leasing offer flexibility and a lower cost when disposing of the asset?
This is a legal maxim most likely similar to a sale and leaseback transaction. traditio brevi manu traditio constitutum possessorium traditio symbolica traditio longa manu
Which of these is not typically a responsibility of a property manager? O Maintenance programs Marketing and leasing O Tenant relations O Income tax analysis
Describe some economic factors that might provide an advantageto leasing.
What is the meaning of the following:- IAS 40 paragraph 32A, An entity may: (a) choose either the fair value model or the cost model for all investment property backing liabilities that pay a return linked directly to the fair value of, or returns from, specified assets including that investment property; and (b) choose either the fair value model or the cost model for all other investment property, regardless of the choice made in (a).

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