Which of the following should be included by the lessee in determining the amount of the right-to-use asset and lease liability: a. Fixed Payments: Yes/Unguaranteed Residual Value: No b. Fixed Payments: Yes/Unguaranteed Residual Value: Yes c. Fixed Payments: No/Unguaranteed Residual Value: Yes d. Fixed Payments: No/Unguaranteed Residual Value: No

Which of the following is /are usually correct regarding operating leases? I. The lessor will recoup the entire cost of the leased asset during the term of the original lease. II. The leases are fully amortized. III. The lessee has an obligation under the cancellation option to cancel the lease contract prior to the expiration date. IV. The lessor is responsible for insuring the leased asset. Select one: a. I and III only b. II, III, and IV only c. III and IV only d. IV only

For a depreciable asset, the amount of depreciation recognised shall be in accordance with AASB 116. The asset shall be:   a fully depreciated over the shorter of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term.   b fully depreciated over the shorter of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term.   c fully depreciated over the longer of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term.   d fully depreciated over the longer of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term.

Compare the way a purchase option that is reasonably certain to be exercised and a lessee-guaranteed residual value are treated by the lessee and lessor when determining lease payments.