In Determining If the Risk and Rewards of Ownership Have

question 18

Multiple Choice

In determining if the risk and rewards of ownership have been transferred,AASB 117 states the following would indicate a finance lease is in effect:

• A) Ownership of the assets transfers at the end of the lease term for a variable payment equal to its then fair value.
• B) Contingent rents exist.
• C) The lease is non-cancellable by the lessor.
• D) All of the given answers are correct.

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Definitions:

Basic Earnings Per Share

A calculation that measures the profitability available to a company's common shareholders, dividing net income by the number of common shares outstanding.

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a specified number of another type, typically common stock, at a predetermined price.

Basic And Diluted Earnings Per Share

A measure of a company's profitability that calculates earnings for each share of stock, considering both current shares and potential shares from conversions.

Comprehensive Income

A measure of all changes in equity of a business that result from recognized transactions and events, including unrealized gains and losses.