Under IFRS 16, a Lease in Which the Lessor Is

question 85

Multiple Choice

Under IFRS 16, a lease in which the lessor is involved in mostly financing operations, such as lease-finance companies is called a

• A) sales-type lease.
• B) manufacturer lease.
• C) direct financing lease.
• D) finance lease.

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Definitions:

Bond Interest Expense

The cost associated with borrowing through bond issues, representing the periodic payments made to bondholders during the life of the bond.

Amortization of Bond Premium

The gradual expense recognition of the premium paid over par value for a bond over its life, reducing the bond investment value.

Discount on Bonds Payable

The shortfall between a bond's listed face value and the price it achieves in the market when it ends up selling for less than that face value.

Face Amount

The face amount is the nominal or dollar value printed on a financial instrument like a bond or insurance policy, representing the amount due at maturity or the coverage amount.