Identify each of the followings

A.            Duration of a lease; length of time a lease will be in effect.

B.            A system of criteria established in ASC Topic 842 to trigger the appropriate accounting treatment for a given lease.

C.            Incremental costs associated with consummating a lease, essential to acquiring the lease, and would not have been incurred had the lease not been executed.

D.            Obligations for taxes, insurance, or maintenance associated with leased property, which may be paid by the lessee, the lessor, or shared between them.

E.            One of the lease classifications in which the lessee effectively obtains control of the underlying asset by meeting one of five lease criteria.

F.            The present value of the lease payments (including the present value of the residual value guaranteed by the lessee) plus the present value of any unguaranteed residual value; often referred to as the fair value of the leased asset or the lease receivable plus the present value of any unguaranteed residual value.

G.           A lease that, at the commencement date, has a lease term of 12 months or less, and does not include an option to purchase the underlying asset that the lessee may be reasonably certain to exercise.

H.            An asset that represents a lessee's right to use an underlying asset for the lease term.

I.             The original tenant or user of a leased asset.

J.             A provision in a lease that gives the lessee the option of purchasing the leased asset at a specified exercise price, and which the lessee is reasonably certain to exercise.

K.            The estimated residual value of a leased asset exclusive of any portion guaranteed.

L.             A lease classification in which the lessor effectively transfers control of an underlying asset to a lessee, and which may or may not have profit or loss.

M.          A contractual arrangement between a lessor and a lessee that conveys, to the lessee, the right to use specific real or personal property belonging to the lessor for a specified period of time in exchange for consideration.

N.           The interest rate that, at the inception of the lease, causes the present value of the lease payments plus the present value of the amount the lessor expects to derive from the leased asset at the end of the lease term, to be approximately equal to the fair value of the leased asset.

O.           An accounting process used to allocate lease payments between a reduction of the lease liability/net investment in the lease and interest.

P.            A lease in which a lessor transfers use of an asset to a lessee for a period of time but does not effectively transfer control of the underlying asset.

Q.           The interest rate that, at the inception of the lease, the lessee would have incurred to borrow the funds necessary to buy the leased asset on a secured loan with repayment terms similar to the payment schedule called for in the lease.

R.            Periodic payments from the lessee to the lessor for the right to use property subject to a lease.

S.            The owner of the leased asset.

T.            A guarantee made by a lessee to the lessor that the value of an underlying asset returned to the lessor at the end of the lease will be at least a specified amount.

Operating lease

Effective interest method

Finance lease

Interest rate implicit in the lease

Executory costs

Classification of leases

Bargain purchase option

Sales-type lease

Right-of-use asset

Lessee

Answer rating: 100% (QA)

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