One advantage of leasing voiced in the past is that it kept liabilities off the balance sheet, thus making it possible for a firm to obtain more leverage than itotherwise could have. This raised the question of whether or not both the leaseobligation and the asset involved should be capitalized and shown on the balance sheet. Discuss the pros and cons of capitalizing leases and related assets

Q: ndicate all statements that are correct.   Select one or more: a. Net Income is higher at first…

A: The lease system is type of arrangement in which right to use of the assets is given by payment of…

Q: Explain the ways in which property owners can structure leases in order to recover operating…

A: Leasing refers to acquiring an asset from a lessor in lieu of rental payments.

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: In Note 4, “Summary of accounting policies,” part 4.14, “Leases,” AF states that“leases are…

A: Financial Accounting Standards Board:   It is commonly known as FASB. It is a private, non-profit…

Q: Which of the following statements is true? OA. The right-of-use asset is increased by prepaid lease…

A: A lease is the type of source of finance where one party (lessor) allow another party to use the…

Q: Which of the following statements is true? Group of answer choices The right-of-use asset is…

A: The objective of the question is to identify the correct statement about the calculation of the…

Q: Capitalizing a lease means that the firm issues equity capital in proportion to its current capital…

A: The lease is the type of agreement that is for the property used to rent a house. In this one…

Q: Argue "in favor" or argue "against" whether to capitalize operating leases?

A: ANSWER :   Operating Leases are the short term leases for which the ROU asset and Receivables are…

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: 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: es may be cancelled by leasing sing may increase certain types of certainty that might increas the…

A: As far as concerned about the lease  If we buy the asset from market certain kind of taxes can be…

Q: A company has invested in a financial instrument and is trying to determine whether or not it is a…

A: When determining whether a financial instrument is a derivative, the materiality of the amount…

Q: Leasing can be beneficial due to: A Tax advantages for both lessors and lessees. B Guaranteed asset…

A: A lease refers to an agreement between two parties in which one party agrees to give the right to…

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: Clearly explain why the issue of lease capitalization has been controversial.

A: A lessee is a person or a company that obtains an asset for use, in exchange for lease rent;…

Q: A lease is a financing instrument used by an entrepreneur to acquire assets for the…

A: Leases – It is defined as a contract that conveys the right to control the use of an identified…

Q: Q7a. Clearly explain why the issue of lease capitalization has been controversial.

A: Q7a. Lease capitalization : The two main categories of leases are operating lease and finance lease.…

Q: What are the pre-requisites of having a successful finance leasing?

A: Finance  leasing is the process wherein the finance company owns the asset legally throughout the…

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: Identify the CORRECT statement regarding the effect of lease on return on capital employed. Select…

A: Taking assets on lease is the best ways to save money which was supposed to be blocked if purchased…

Q: Positive covenants specify actions a borrowing company must take as part of the indenture. These…

A: The statement is False. Positive covenants, part of a loan's terms, do require the borrower to…

Q: Why is lease financing sometimes referred to as off–balance sheetfinancing?

A: Lease is a type of an agreement that involves two parties i.e. owner (lessor) and lessee. In this…

Q: Lease accounting changes represent a significant paradigm shift in the accounting landscape,…

A: Operating leases are generally off balance sheet items. And hence they will not impact debt portion…

Q: ease terms can be considered to be "significantly affected": a. when the terms are the same for…

A: Leases - It is contract between lessor and lessee wherein an asset is given to lessee in…

Q: Assuming that FASB Statement 13 and ASU2016-02 are working as they are supposed to work,should…

A: The Financial Accounting Standard Board (FASB) introduced a new accounting standard ( ASU…

Q: Weigh-in the advantages and disadvantages of leasing over debt financing in acquiring long-term…

A: Long-term assets are assets that will benefit the organisation for more than a year, whether they…

Q: derivative is a financial instrument whose value is determined by _____________________.  (Select…

A: A derivative is a financial instrument, the value of which is determined by the performance of the…

Q: All of the following are benefits of leasing except: They have the ability to shift the tax benefits…

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

Q: For companies that prepare their financial statements in accordance with both U.S. GAAP and IFRS, a…

A:

Q: The use of the fair value option to account for Non - current liabilities is allowed by IFRS . Many…

A: Under fair value accounting the assets and liabilities are recorded in the financial statements at…

Q: e following statements relate to the impact on the financial statements for operating vs. finance…

A: Lease- Lease agreements are contracts or instruments that transfer property from one person to…

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: Differing accounting practises for leases could potentially lead to manipulation of a company's…

A: As Per IAS 17 there are two types of leases 1. Finance Lease It is the type of lease which…

Q: Explain the recognition of profit on a finance lease transaction for lessorswho are manufacturers or…

A: A lease can be defined as a contract or agreement that allows the lessee to pay a certain amount of…

Q: Which statement is correct in comparing capital leases to operating leases? a) A capital lease will…

A: Leases are usually of two types – capital leases and operating leases.   In a capital lease all…

Q: Under the FASB old lease standard,

A: Capital lease which is now also known as finance lease resembles financed purchases , the…

Q: Firms may or may not capitalize a financial lease. Question 11Select one: True False

A: A financial lease, also known as a capital lease, is a long-term lease agreement where the lessee…

Q: What should be the discount rate for capitalizing the operating leases?A. If possible, the implied…

A: Capitalizing an operating lease means converting the operating lease's future cash outflows into a…

Q: and the corresponding lease obligation did n malance sheet. Today, though, the situation ha ise all…

A: Lease can be of two types. Operating lease Finance Lease   Finance Lease is a lease wherein all…

Q: Briefly explain two disadvantages of sale and leaseback transactions

A: In a sale and leaseback, a business sells a structure that it both owns and occupies while also…

Q: Finance leases are agreements that are formulated as leases, but are installment purchases, i.e.,…

A: Finance Lease: In this type of lease, the notional ownership is transferred by the lessor to lessee…

Q: In the lease versus buy decision, leasing is often preferable Oa. because the lessee may have…

A: Decision making is a process whereby an individual/organization decides on the course of action to…