Which of the following is incorrect regarding the accounting for leases by a lessee?

Q: A machine is leased and the Present value of the minimum lease payments amounts to the fair value of…

A: A. In the Balance Sheet as a fixed asset only:This option doesn't account for the liability to the…

Q: Which of the following is NOT a correct statement of one of the lease classification test for the…

A: A lease is a contractual agreement between a lessor (owner of an asset) and a lessee (user of the…

Q: If, as part of the accounting for a​ lease, the lessee debits an asset and credits a​ liability,…

A: Assets have debit balance while liabilities and equity have credit balance. A lease is a contractual…

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: Under IFRS: lessees and lessors recognize right-of-use assets. lessees always use the operating…

A: The correct answer is “lessors do not distinguish between sales-type and direct financing lease”.

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: Under IFRS: lessees may use alternative measurement bases (e.g., revaluation accounting) for the…

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

Q: Prior to 2019, lessees did not include the right-of-use asset and the lease liability for operating…

A: The question is asking about the impact of the new standards set by the Financial Accounting…

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: Lease 105 does not contain a purchase option but the present value of the lease payments equals the…

A: There are two types of finance lease and operating lease. Finance lease is a lease which satisfies…

Q: What is the reason for excluding variable lease payments from the measurement of the lessee’s lease…

A: Under IFRS 16, In lease payments there are two types of payments. One is fixed and other is variable…

Q: customer can direct the use of the asset. The asset is explicitly or implicitly identified in the…

A: Identified asset:I An asset whose fair value or market value can be calculated at particular given…

Q: lassified as a finance lease or as an operating lease.

A: In case of a financial lease only, assets or liabilities are created. In case of operating lease…

Q: Under US GAAP, It is possible that the lessor changes the lease classification from operating lease…

A: Operating lease gives right of use of equipment for given period of time and sale type equipment…

Q: Assume a lessee leases equipment and insists on terms that qualify it as an operating lease, barely…

A: In simple term lease means it was a specific contract or agreement between the two parts to use the…

Q: The effect of an operating lease on the income distribution schedule: checked a. is non-existent…

A: When one asset is given for the purpose of use to another person on rent, it is called lease. The…

Q: Need help with this question

A: Step 1:A lease is a contract in which  the lessee has to pay  purchase consideration to the lessor…

Q: Which one of the following would normally lead to a lease being classified as an operating lease?…

A: Solution: "At the inception date of the lease agreement, the present value of the total lease…

Q: A lessee should classify a lease transaction as a finance lease if it is noncancelable and one or…

A: A lease transaction refers to an agreement between two parties, the lessor and the lessee, where the…

Q: Provide correct answer for this question

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

Q: Which one of the following is an indicator that a lease is an operating lease for accounting…

A: Option 1: This option is incorrect because if the lease transfers ownership of the asset to the…

Q: Under ASC 842 If the present value of the lease payments is less than or equal to the fair value of…

A: A lease is a contract in which one party agrees to rent an asset owned by another party on certain…

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.