Which of the following is incorrect regarding the accounting for leases by a lessee?
Q: Which of the following is not included in the lease payments for the purpose of computing the lease…
A: This question deals with the IFRS 16 "Leases". When lessee lease the asset from the lessor then…
Q: Initially, a lease liability is measured a. by the lessee at the present value of the lease…
A: Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…
Q: Which of the following lease provisions would cause a lease to be classified as an operating lease?…
A: There are two types of lease one is operating lease and other is capital lease or financial lease.
Q: 1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Answer True or False Initial direct costs are immediately recognized as an expense by the lessor…
A: Per Per PFRS 16 Inidial direct cost are the incremental cost of obtaining a lease that would not…
Q: 1. In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest…
A: A lessor's interest income is the difference between the sum of the total rentals due to the lessor…
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: 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: What is the theoretical basis for the accounting standard that requires certain long-term leases to…
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…
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: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…
A: In the given case option A is correct... Both are required accounting procedures for the decrease in…
Q: The residual value is the estimated fair value of theleased property at the end of the lease…
A:
Q: Answer True or False Both finance and operating leases are subject to capitalization.
A: Finance Lease : lease where substantially all risk and rewards incidental to the ownership of the…
Q: If a sale and leaseback transaction results in a finance lease, any excess of sale proceeds over the…
A: Solution A lease is a contract outlining the terms under which one party agrees to rent an asset -…
Q: nitial direct costs are immediately recognized as an expense by the lessor when the cost incurred in…
A: Lease agreement is the agreement in which a person acquires the right to use the asset of other at a…
Q: Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The…
A: Answer: Option 4 - All of the above. Reason: If a lease meets one or more of the following criteria,…
Q: When a lease modification results in partial termination of a lease, the change shall be accounted…
A: Answer is option D) The increase (decrease) in lease liability as a result of the lease modification…
Q: The residual value is the estimated fair value of the leased property at the end of the lease term.…
A: Finance lease is also known as capital lease.This is a long term lease agreement in which the lessee…
Q: When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an…
A: A non-refundable lease bonus paid by a lessee on signing an operating lease is treated as deferred…
Q: Which of the following statements is correct in accordance with AASB 16 Leases? Group of answer…
A: The question is related to Accounting for Lease.
Q: Which of the following is not correct statement for accounting by the lessee? O a. The lessee…
A: The incorrect Statement for accounting by lessee is "The operating lease method is used to account…
Q: In a lease that is recorded as a manufacturer's lease or dealer's lease by the lessor, interest…
A: A manufacturer/dealer lessor is a lessor that either manufactures the leased asset or acquires the…
Q: IFRS 16 states that lessors shall recognize assets held under finance lease as a receivable at an…
A: IFRS 16 enables lessees to record assets and liabilities for any and all leases with terms of more…
Q: Which of the following items would not be included in the calculation of the lease liability for a…
A: Finance lease is the lease where lessee has operation control as well as share of economic risk and…
Q: A lease agreement will qualify as a finance lease if one of these conditions occur: A. The lessee…
A: Lease: It can be defined as a contractual agreement where one party known as lessor grants the right…
Q: Which of the following is not one of the procedures for accounting by the lessee for a decrease in…
A: procedures for accounting by the lessee for a decrease in lease scope::: Decrease in the right of…
Q: The basic difference between a direct-financing lease and a sales-type lease is the recognition of…
A: A direct financing lease is a type of lease under which the lessor purchases the asset and lease it…
Q: For a lessor, the leased asset appears on the balance sheet and continues to be depreciatedwhen the…
A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…
Q: Under a direct financing lease, the excess of aggregate rentals over the cost of the leased property…
A: Lease refers to the contract that outline the terms where one party of the contract agrees to rent…
Q: Which of the following statements characterizes a sales-type lease? A)The lessor recognizes only…
A: SOLUTION- SALES TYPE LEASE IS A FINANCE LEASE IN WHICH THE FAIR MARKET VALUE (OR IF LOWER , THE PV…
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…
Q: (4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned…
A: A lease can be referred to as an agreement in which one party, lessor, grants the right to use an…
Q: When should a lessor recognize as income a nonrefundable lease bonus paid by a lessee on signing an…
A: Solution: The receipt of the lease bonus creates deferred revenue whether refundable or non…
Q: On the lessor's accounting, which of the following situations would prima facie lead to a lease…
A: On the lessor’s accounting, following situations would prima facie lead to a lease contract being…
Q: Which type of lease will not increase a company’s assets or long-term liabilities? Select one: a. A…
A: Lease means giving out the assets by lessor to lessee to use that assets in return of rent.…
Q: . The primary difference between a direct-financing lease and a sales-type lease is the amount of…
A: Lease is a contract or agreement between two parties in which one party provides it's asset for use…
Q: Which of the following accounts is not included in the journal entry recorded by a lessee when…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: The objective of IAS 17 Leases is to prescribe the appropriate accounting treatment and required…
A: When a lease is classified as a finance lease, the lessee must account for both an asset and a…
Q: In accounting for lease contracts, companies reporting under U.S. GAAP O are required to treat the…
A: ASC 842 is an accounting standard that deals with accounting of leases. Leases are two types.…
Q: An increase in interest income recognized for the period on a lease agreement will have the effect…
A: The amount of interest received during a certain time period is referred to as interest income. It…
Q: Which of the following statements is false regarding the accounting for leases? The lessor may not…
A: From the above options, the fourth option is false: 'A lessor included a rent collected in advance…
Q: statements is correct related to lease
A: Option "a" and "b" are incorrect because it deals with depreciation of leased asset, not lease.…
Q: If a lease term is more than 80% of the asset’s life and the leased property is transferred from the…
A: Answer: The given statement is True.
Q: On the lessor’s accounting, which of the following situations would prima facie lead to a lease…
A: Solution: On the lessor’s accounting, following situations would prima facie leas to a lease…
Q: Which of the following statements is false regarding the accounting for leases? The amount of lease…
A: A lease rental collected in Advance is treated as Rent Advance and is included in the Non current…
Q: 1. Under IFRS 16, which of the following statements is true? * The lessee automatically accounts the…
A: Lease is a type of contract in which the actual owner of the asset gives the right to use the asset…
Which of the following is incorrect regarding the accounting for leases by a lessee?
A. A lessee recognizes the same total amount of expense on a lease whether it uses the general recognition or the recognition exemption under PFRS 16.
B. The interest expense on a lease liability decreases each period
C. According to PFRS 16, executory costs, such as insurance and real property taxes, are always excluded from lease payments regardless of whether these costs transfer goods or services to the leasee.
D. A lessee shall allocate the total consideration in a contract to the lease components and non-lease components of the contract
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Which of the following statements are false under a sale a leaseback transaction? I. If a sale and leaseback transactions results in a finance lease, any excess of proceeds over the carrying amount shall not be immediately recognized as income by a seller-lessee. Instead, it shall be deferred and amortized over the lease term. II. If the sale price is established at fair value under an operating lease, any gain or loss shall be deferred and amortized over the period which the asset is expected to be used. I only II ONLY BOTH I AND II NEITHER I OR IIWhich of the following is false with respect to lease accounting under IFRS? IFRS require lessees to recognize a right-of-use asset and related lease liability for leases with terms longer than one year. IFRS does not include any explicit guidance on collectibility of the lease payments by lessors and amounts necessary to satisfy a residual value guarantee. IFRS does not permit recognition of selling profit on direct financing leases at lease commencement. IFRS uses essentially the same lessor accounting model as GAAP for leases classified as sales-type or operating.One of the following statements is false: a. If the underlying asset will not revert to the lessor, the residual value is simply ignored by the lessor in the computation of unearned interest income and gross profit on the sale. b. The underlying asset will remain with the lessee if the lease provides for either a purchase option that is reasonably to be exercised or transfer of title to the lessee upon the lease expiration. c. When a lessor actually sells an asset that it has been leasing, the difference between the sales price and the carrying amount of the lease receivable is recognized in profit or loss. d. The gain or loss that pertains to the right retained by the seller-lessee in a sales and leaseback transaction is not recognized.
- (4) In a lease that is appropriately recorded as a direct-financing lease by the lessor, unearned income A. should be amortized over the period of the lease using the effective interest method. B. should be amortized over the period of the lease using the straight-line method. C. does not arise. D. should be recognized at the lease's expiration. E. None of these answer choices are correct.In relation to a short-term operating lease, which of the following statements is NOT correct? a. The lessee will be responsible for repairs and maintenance of the leased asset b. The lease period will not cover the leased asset’s useful economic life c. The asset and lease obligation will not be recorded in the statement of financial position d. An operating lease is a rental agreement Clear my choiceAn increase in interest income recognized for the period on a lease agreement will have the effect of reducing the unearned revenue account for the lessor. Select one: True False
- Which of the following statements is false regarding the accounting for leases? The lessor may not use the straight-line basis for recognizing lease income under an operating lease if another systematic basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. The amount of lease income recognized each year by the lessor under an operating lease is typically constant even though the contractual payments increase every year by a certain amount specified in the contract. A lessor includes initial direct costs incurred on the operating lease as part of the cost of the leased asset, and initial direct costs are to be recognized in profit or loss on the same basis as rent income is recognized. A lessor includes a rent collected in advance as part of the cost of the leased asset.Packer Company (the lessor) concludes that its lease meets one of the tests to be classified as a sales-type lease. However, collection of lease payments is not probable. In this case, how should Packer account for any lease payments received?Which of the following statements is correct regarding the accounting for leases? The lessee depreciates the leased asset under a “short-term” or a “low-valued asset” lease The lessor depreciates the leased asset under a finance lease An entity can never be both a lessor and a lessee of a same leased asset When discounting lease payments both the lessor and the lessee use the interest rate implicit in the lease, unless the lessee cannot determine this rate
- When a lease modification results in partial termination of a lease, the change shall be accounted for as any of the following except: A. The increase in lease liability as a result of the lease modification is accounted for as an adjustment to the carrying amount of the right of use asset. B. The excess of the decrease in carrying amount of lease liability over the decrease in the carrying amount of the right of use asset is accounted for as a termination gain. C. The excess of the decrease in carrying amount of right of use asset over the decrease in the carrying amount of the lease liability is accounted for as a termination loss. D. The increase (decrease) in lease liability as a result of the lease modification is accounted for as termination loss (gain).determining whether a contract is or contains a lease? 1. Which of the following is not one of the criteria when c. Right to obtain substantially all of the economic benefits from use of an identified asset throughout the period of 'identified' if it is implicitly specified in the contract. C. the customer shall not account for the contract as a lease if a. the customer shall not account for the contract as a lease. b. the customer shall account for the contract as a lease. d. the customer shall account for the contract as a lease if that it has the right to direct the use of the asset. PROBLEM 2: MULTIPLE CHOICE - THEORY a. Identified asset b. Identified liability from use of an identified asset throughout the period of d. Right to direct the use of the identified asset throughout the period of use use 2. Which of the following statements is incorrect? a. An asset can be 'identified' if it is implicitly specified at the time it is made available for use by the lessee. b. In a lease…Which of the following is not one of the procedures for accounting by the lessee for a decrease in lease scope? a. both are required accounting procedures b. both are not required accounting procedures c. Adjustment of the decreased finance lease liability to the present value of future lease payments d. Decrease in the right of use asset equal to that of the peso decrease in finance lease liability to reflect decrease in scope