Under IFRS, the Criteria to Determine Whether a Lease Should

question 17

Multiple Choice

Under IFRS, the criteria to determine whether a lease should be capitalized include:

• A) the present value of the minimum lease payments is 90% or more of the fair value of the asset at the inception of the lease.
• B) the term of the lease is 75% or more of the economic life of the asset.
• C) the term of the lease is equal to substantially all of the economic life of the asset.
• D) the present value of the minimum lease payments is equal to substantially all of the fair value of the asset at the inception of the lease.

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Definitions:

Rent-Controlled Apartment

Housing units whose rent is set and regulated by a government authority, typically below the market rate to make it affordable.

Agency Theory

Addresses potential conflicts of interests among different groups of stakeholders in an organization. The name of the theory and some of its basic principles are derived from the fact that, in most modern organizations, the individuals who own a firm do not actually run it on a daily basis. Problems arise when the interests of the owners (the principals) are in conflict with the interests of the managers (agents).

HR Managers

Professionals responsible for overseeing the human resources department, implementing HRM practices, and ensuring effective use of employee talent and resources.

Conflicts of Interest

Situations where an individual's personal interests could potentially interfere with their professional duties or responsibilities.