Leasing Flashcards
1
Q
Lease shall be classified as a FINANCE LEASE by the lessee
A
1.Lease transfers ownership to the lessee during lease term.
2.Lease contains a bargain purchase option.
3.Lease term is 75% or more of the economic useful life of the property.
4.Present value of the minimum lease payment equals 90% or more of FV of the leased property.
5.Leased asset does not have an alternative use.
2
Q
Short term lease
A
If the lease is less than 12 months then it is short term lease
