The Key Difference Between ASC 842 and SFAS No

question 20

Multiple Choice

The key difference between ASC 842 and SFAS No. 13 in accounting for leases by lessees is

• A) The recognition of a right‐to‐use asset (ROU) and lease liability on the statement of financial position for those leases previously classified as operating leases under SFAS No. 13
• B) Leases will be measured at their fair value by lessees
• C) The classification of a lease as a finance by a lessee is based on a completely new set of criteria than was used in SFAS No. 13.
• D) There are no major differences between the two standards in accounting for leases by lessees.

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Definitions:

Firing Potential

The electrical charge difference that triggers a neuron to release chemical signals to communicate with other neurons or muscles; also known as action potential.

Neuron

A nerve cell; the basic building block of the nervous system.

Memory Trace

A term used to describe the physical change in the brain, possibly in the form of neural connections, that represents the existence of a memory.

Specific Memory

A type of memory that pertains to detailed information about a specific event or item.