Which one of the following would normally lead to a lease being classified as an operating lease? a. The lease term is for a period of more than half of the expected economic life of the underlying...

Which one of the following would normally lead to a lease being classified as an operating lease?

a. The lease term is for a period of more than half of the expected economic life of the underlying asset.

b. At the inception date of the lease agreement, the present value of the total lease payments is for an amount substantially less than the fair value of the underlying asset.

c. The lease is cancellable, and all losses associated with the cancellation will be incurred by the lessee.

d. It is reasonably certain at the inception date that the lessee will exercise an option to purchase the underlying asset at the end of the lease term for a price substantially lower than its expected fair value.

Jun 11, 2022

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Which one of the following would normally lead to a lease being classified as an operating lease? a. The lease term is for a period of more than half of the expected economic life of the underlying...

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