Which of the Following Is a One of the Criteria

question 7

Multiple Choice

Which of the following is a one of the criteria for recording a lease as a finance lease, under IFRS?

• A) The lease term is for the major part of the economic life of the asset.
• B) The lease must be cancelable.
• C) The lease doesn't contain a bargain-purchase option.
• D) The present value of the minimum lease payments amounts to 75% of the fair value of the leased asset.

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Definitions:

Interest Free

Describes a loan or credit arrangement that does not require the borrower to pay interest on the borrowed amount.

Short Term Debt

Refers to any financial obligation that is due for repayment within one year.

Interest Rate

The portion of a loan subject to interest fees for the borrower, typically indicated as an annual percentage of the remaining loan principal.

Paid Now

A term indicating an immediate payment or settlement of a transaction.