What nonlease costs might be included as part of lease payments? How are they accounted for by the lessee in a finance lease when paid by the lessee? When paid by the lessor? Explain.

Q: Which of the following does not affect the computation of the rental income/expense under an…

A: Security deposits does not affect the computation of the rental income/expense under an operating…

Q: Describe how a "bargain buy option" affects the lessee's accounting for a finance lease deal.

A: HERE IS THE ANSWER:

Q: Which of the following is not a criterion for a lease to be recorded as a finance lease?(a) There is…

A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: What comprises a lessee’s minimum lease payments? What is excluded?

A: A lease is a contractual obligation under which one party (lessee) uses the assets or resources of…

Q: Why we will have a residual value in an operating lease?

A: Residual value is an estimated value of the asset at the end of lease term. In operating lease, we…

Q: Describe and demonstrate how the lessee accounts for a finance lease and the lessor accounts for a…

A:

Q: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

Q: Why would a lease include a contingent payment provision? Explain.

A: Contingency payment provisions is a provision for a possible event or circumstance which is not…

Q: True or false explain

A: A lease is a contractual agreement between the lessor and lessee. The owner is paid by the user…

Q: What payments are included in the lease liability?

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: The discount rate influences virtually every amount reported in connection with a lease by both the…

A:

Q: A lease might specify that lease payments may be increased (or decreased) at some future time during…

A:

Q: Explain the impact on lease accounting of uncertainties, including uncertain lease terms, variable…

A: Uncertainties in lease transactions: There are several issues with respect to lease transactions…

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: Why is it appropriate to compare the cost of lease financing with that of debtfinancing?

A: Cost of lease financing is the cost that is bear by the lessee who have owned the right from the…

Q: what is the value of the lease?

A: Value of Perpetual annuity = PMT/r PMT is the monthly payment r is the monthly compounded rate.…

Q: What does the present value of the residual value of a lease asset is called? Describe about it in…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: Which of the following payment/s is/are included along with lease liability?   a- All of them b-…

A: According to IAS 17, LEASES, There are two types of Leases: 1. Finance Lease 2. Operating Lease

Q: Why the lease is considered a “short-term lease”?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: At the beginning of a Type B lease, the lessor will record what asset and liability, if any?

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for a…

Q: Describe the effect on the lessee of a “bargain purchase option” on accounting for a finance lease…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: Rent received in advance by the lessor in an operating lease should be recognized as revenue

A: Concept used :

Q: Which of the following is a criterion for classifying a lease for a lessee as a finance lease? The…

A: Answer: Option 4 - All of the above. Reason: If a lease meets one or more of the following criteria,…

Q: Write down what is the Composition of Lease Term?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: From a lessee perspective, distinguish between a finance lease and an operating lease.

A: Lessees have available two lease accounting methods: (a) the operating method and (b) the…

Q: Identify possible adverse effects on a lessee entity’s financial statements arising from the…

A: Lease accounting is the process of recording the lease activities to show the financial impact of…

Q: Lease bonus is recognized by the lessor as a liability amortized over the lease term. * True or…

A: Introduction:- A lease defined as where one party provide or gives right to use a property to…

Q: What is the reason for excluding variable lease payments from the measurement of the lessee’s lease…

A: Under IFRS 16, In lease payments there are two types of payments. One is fixed and other is variable…

Q: Explain Nonlease Components of Lease Payments.

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: Describe what if Lease Terms are modified?

A: Lease Terms are the terms on which both lessor and lessee agrees to enter into a specific lease. It…

Q: What are the primary benefits to a lessor of entering into a lease arrangement

A: The primary benefits to a lessor of entering into a lease arrangement will be explained:

Q: Explain the Remeasurement of the Lease Liability...

A: Lease Liability:  In order to determine the lease liability, lease payment information should be…

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: Describe about the EFFECT OF A RESIDUAL VALUE ON LEASE CLASSIFICATION?

A: Introduction Residual value is the amount, the asset's owner earns after selling/disposing that…

Q: When a lease qualifies as a finance lease, what amount is initially recorded as the cost of the…

A: Solution Concept In case of finance lease , The initial cost of right of use asset include…

Q: Describe about the lease expenses in a finance lease?

A: Finance lease: The finance lease refers to the contract between two parties which satisfies the…

Q: Compare the way a bargain purchase option and a residual value are treated by the lessee when…

A:

Q: In a financing lease, “front loading” of lease expense and lease revenue occurs. What does this…

A: Finance lease: Finance lease is a parallel type of direct financing whereby the owner (lessor)…

Q: If the gains or losses from the fluctuation in the fair value of the residual accrue to the lessor,…

A: Lease accounting is the accounting to adjust the transaction where a fixed asset is taken on rent…

Q: The appropriate asset value reported in the balance sheet by the lessee for an operating lease is:

A: GIVEN   The appropriate asset value reported in the balance sheet by the lessee for an operating…

Q: In accounting for an operating lease, how are the lessee’s and lessor’s income statements affected?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: Compare and contrast a finance lease with an operating lease.

A: Lease:   It is an agreement between two parties where the one party agrees to rent an asset owned by…

Q: What is the initial lease liability?

A: 1. Initial lease liability: Annual rental payable at the end of each year* Present value of an…

Q: What are executory costs? How are they accounted for by the lessee in a capital lease when paid by…

A: Executory costs are the costs related with ownership of an asset which includes maintenance…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.