The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire the
Fantastic news! We've Found the answer you've been seeking!
Question:
The costs that (a) are associated directly with consummating a lease, (b) are essential to acquire the lease, and (c) would not have been incurred had the lease agreement not occurred, are referred to as initial direct costs. Initial direct costs incurred by the lessee are:
Multiple Choice
deferred in an operating lease until the asset is returned to the lessor.
a reduction to the lease liability at the beginning of the lease.
added to the right-of-use asset and expensed over an amortization period.
recorded as an expense at the beginning of the lease.
Related Book For
Financial and Managerial Accounting Information for Decisions
ISBN: 978-0078025761
6th edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
Posted Date: