At Inception of the Lease,what Is the Cost Basis of an Asset

question 73

Multiple Choice

At inception of the lease,what is the cost basis of an asset acquired from a lease arrangement when the lease is classified as a finance lease?

• A) The net realisable value of the asset plus present value of the minimum lease payments.
• B) The fair value of the leased asset.
• C) The lower of fair value of the leased asset or present value of the minimum lease payments.
• D) The lower of fair value of the leased asset or present value of the minimum lease payments plus any initial indirect costs.
• E) The sum of the future minimum lease payments.

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Definitions:

Objectively

In a manner that is based on unbiased facts and evidence, without influence from personal feelings or opinions.

Dichotomous Thinking

A cognitive distortion involving seeing things in black and white categories, without recognizing the continuum or grey areas in between.

Selective Abstraction

A cognitive distortion where an individual focuses on a single negative detail or event, often out of context, leading to a skewed perception of reality.

Overgeneralizing

A cognitive distortion where an individual makes broad interpretations from a single or few events, often leading to negative thinking patterns.