In May 1901, William Knox DArcy convinced the Shah of Persia (present-day Iran) to allow him to
Question:
1. In Great Britain, a finance lease is what we in the United States would call a capital lease. According to Note 35, British Petroleum expects to make total lease payments of $916 million under finance leases. However, a liability of only $620 million is reported. Why is there a difference between the two amounts?
2. The $916 million payment amount for the finance leases reflects the total of all lease payments that will be made under the agreements. British Petroleum also reports $32.584 billion of borrowings. Does that $32.584 billion amount reported reflect the amount of all payments that will be made under the loan agreements? Explain.
3. The future finance lease payments are separated into amounts to be repaid within one year, within two to five years, and after five years. How would a financial statement user find this payment timing information to beuseful?
Step by Step Answer:
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain