Question: A lessee should classify a lease transaction as a capital
A lessee should classify a lease transaction as a capital lease if it is noncancelable and one or more of four classification criteria are met. Otherwise, it is an operating lease. What are these criteria?
Relevant QuestionsWhat is a bargain purchase option? How does it differ from other purchase options?The discount rate influences virtually every amount reported in connection with a lease by both the lessor and the lessee. What is the lessor's discount rate when determining the present value of minimum lease payments? What ...What are the guidelines for determining when a material amount of land is involved in a lease?In the situation described in BE 15-4, how should Corinth classify this lease? Why?Adams Storage and Appraisal leased equipment to OAC Corporation for an eight-year period, at which time possession of the leased asset will revert back to Adams. The equipment cost Adams $32 million and has an expected ...
Post your question