When Negotiating Operating Leases, Any Initial Direct Costs Incurred by Lessors

question 22

Multiple Choice

When negotiating operating leases, any initial direct costs incurred by lessors are to be:

• A) recognised as an expense over the lease term.
• B) initially capitalised into a separate deferred costs account.
• C) added to the carrying amount of the underlying asset.
• D) all of the above.

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Definitions:

Propinquity Effect

A phenomenon where people form closer relationships with those physically nearer to them due to increased opportunities for interaction.

Friendship Patterns

The recurring dynamics, interactions, and behaviors observed within friendships, often influenced by cultural, societal, and personal factors.

Mere Exposure Effect

The tendency for individuals to develop a preference for things simply because they are familiar with them.

Propinquity Effect

The tendency for people to form friendships or relationships with those whom they encounter often, based on physical or geographical closeness.