Current GAAP Requires a Lessee to Account for Certain Leases

question 48

Essay

Current GAAP requires a lessee to account for certain leases as capital leases.
Required:
What is the rationale for requiring companies to account for leases as capital leases?

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Definitions:

Foreign Banks

Banks that are based in a country different from the country of operation, often providing a range of financial services like deposits, loans, and currency exchange.

Eurobonds

International bonds issued in a currency other than the currency of the country or market in which it is issued.

Denominated

Used to describe the currency in which a financial transaction or investment is stated or valued.

Eurobonds

International bonds issued in a currency not native to the country where it is issued, allowing companies to raise capital in a foreign currency.