Which of the Following Factors Is Most Indicative That a Lease

question 64

Multiple Choice

Which of the following factors is most indicative that a lease should be recorded as a a finance lease under IFRS?

• A) Ownership of the property is transferred to the lessee at the end of the lease.
• B) The present value of the minimum lease payments is at least equal to the majority of the cost of the property at the lease's inception.
• C) The lease term equals at least 50% of the economic life of the asset.
• D) The leased asset can be transferred to a subsequent owner during the course of the lease.

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Definitions:

Marginal Revenue

The additional revenue that is gained from selling one more unit of a good or service.

Purely Competitive Firm

An enterprise that operates in a perfectly competitive market, where it is a price taker due to the homogeneity of products and the presence of many buyers and sellers.

Market Price

The market rate at which an asset or service can currently be acquired or disposed of.