What nonlease costs might be included as part of lease payments? How are they accounted for by the lessee in a finance lease when paid by the lessee? When paid by the lessor? Explain.

Q: Describe how a "bargain buy option" affects the lessee's accounting for a finance lease deal.

A: HERE IS THE ANSWER:

Q: What are some important lease provisions which investors should be aware of when analyzing the…

A: An investment becomes a real estate investment trust (REIT) when it satisfies certain provisions.…

Q: How does the existence of leasehold improvements can affect the determination of the lease term?

A: Leasehold Improvements are referred to as any of the changes or improvements made to the rental…

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

A:

Q: Explain when and how a lessee accounts for a lease by the short-cut method.

A: The shortcut method is when the lessee and the lessor don't account for the lease at its…

Q: What is the concept of sale-leaseback agreement?

A:

Q: Why would a lease include a contingent payment provision? Explain.

A: Contingency payment provisions is a provision for a possible event or circumstance which is not…

Q: What payments are included in the lease liability?

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

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: Determine Lease Revenue?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: What does the present value of the residual value of a lease asset is called? Describe about it in…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: Which of the following payment/s is/are included along with lease liability?   a- All of them b-…

A: According to IAS 17, LEASES, There are two types of Leases: 1. Finance Lease 2. Operating Lease

Q: Where can we obtain reliable guidelines on IFRS lease accounting?

A: It is dealing with where can we obtain reliable guidelines on IFRS lease accounting

Q: Define Finance/Sales-Type Leases.

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

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: Write down what is the Composition of Lease Term?

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

Q: Would using a higher discount rate increase or decrease the amount of lease liability recorded?

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Which of the following accounts would not appear on the income statement of a lessee in connection…

A: A finance lease indicates the agreement between the lessor and lessee where the former provide the…

Q: The term of a finance lease includes the initial lease term and any bargain renewal terms.    True…

A: The answer for the True or false question is discussed hereunder : What is a finance lease?  Finance…

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: What are the primary benefits to a lessor of entering into a lease arrangement

A: The primary benefits to a lessor of entering into a lease arrangement will be explained:

Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

A: The lessor’s discount rate is the effective interest rate when determining the present value of…

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

A:

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

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…

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 accounting for a finance lease/ Sale-type lease, how are the lessee's and lessor's income…

A: The income statements of the lessor and lessee are affected in finance leases and sale-type leases.…

Q: Describe about what is the lessor, lessee and lease contract.

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

Q: Describe about the lease expenses in a finance lease?

A: Finance lease: The finance lease refers to the contract between two parties which satisfies the…

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 concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

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

A:

Q: Describe the accounting for leases by lessees.

A: Finance lease is a lease where all the risks and the rewards are transferred from the lessor to the…

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.