Snowy River Plc Is a Lessee to Two Lease Arrangements

question 60

Multiple Choice

Snowy River Plc is a lessee to two lease arrangements.Lease A is non-cancellable,contains a bargain purchase option and the lease term is equal to 75% of the economic life of the asset.Lease B is non-cancellable,lease term is less than 60% of the economic life of the asset and the minimum lease payment represents 75% of the fair value of the leased asset. How should Snowy River Plc classify Lease A and Lease B respectively?

• A)operating lease; operating lease
• B)operating lease; finance lease
• C)finance lease; finance lease
• D)finance lease; operating lease

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Definitions:

Suburban

Relating to or characteristic of a suburb, a residential area either existing as part of a city or urban area, or as a separate residential community within commuting distance of a city.

Commute

The act of traveling from one's home to their place of work and back.

Urban Sprawl

The uncontrolled expansion of urban areas into the surrounding countryside, often leading to environmental and infrastructural issues.

Mortality Rate

A measure of the decrease in population due to deaths; often expressed as the number of deaths per 1,000 people in a particular population.