In What Way Should Operating Leases Be Accounted for Under

question 48

Multiple Choice

In what way should operating leases be accounted for under IAS 17?

• A)The lease payments should be capitalized and shown on the balance sheet as an asset.
• B)The lease payments must be expensed as they are incurred.
• C)IAS 17 is flexible,allowing both capitalization and expensing of operating lease costs.
• D)The lessee capitalizes the operating lease and the lessor expenses the lease.

---

Definitions:

Relative Frequencies

The ratio of the number of times a particular value or category appears in a data set to the total number of values or categories.

Insurance Company

A business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.

Claims

Assertions or statements, typically requiring verification or evidence, often used in the context of insurance or legal fields.

Homeowners

Individuals who own their residences, possessing both the dwelling and the land it sits on.