Question: IFRS accounts for all leases in the same way (for the lessee), but U.S. GAAP measures lease-related expenses and the right-of-use asset for operating leases

IFRS accounts for all leases in the same way (for the lessee), but U.S. GAAP measures lease-related expenses and the right-of-use asset for operating leases (lessee) differently than for finance leases.

Required

a. Explain the subsequent measurement differences in operating leases and finance leases (lessee).

b. Explain the FASB's reasoning for requiring different subsequent measurement treatment for operating and finance leases. Base your explanation on the Basis for Conclusions for ASU 2016-02, Leases.

c. Explain FASB's reasoning related to whether or not to just report one single lease cost for operating leases. Base your explanation on the Basis for Conclusions for ASU 2016-02, Leases.

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Part a In a finance lease the lessee reduces the rightofuse asset by recording amortization expense on a straightline basis The lessee also remeasures the lease liability reducing it by a portion of e... View full answer

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