The Term 'Bargain Purchase Option' Is Not Used Explicitly in AASB

question 10

Multiple Choice

The term 'bargain purchase option' is not used explicitly in AASB 117 but is described as:

• A) the option to purchase the leased asset for significantly less than its cost at the date the option becomes exercisable, for it to be reasonably certain at the inception of the lease, that the option will be exercised.
• B) the option to purchase the asset at a price that is expected to be sufficiently lower that the fair value at the date the option becomes exercisable, for it to be reasonably certain at the inception of the lease, that the option will be exercised.
• C) being in place when the lessee is guaranteed to undertake the option at the end of the lease.
• D) the option to purchase the asset at a price that is expected to be sufficiently lower that the fair value at the date the option becomes exercisable, for it to be reasonably certain at the inception of the lease, that the option will be exercised and being in place when the lessee is guaranteed to undertake the option at the end of the lease.

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Definitions:

NLRA

The National Labor Relations Act, a foundational U.S. law enacted in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.

Competitive Markets

Markets characterized by numerous buyers and sellers such that no single participant has the market power to influence the prices of products or services.

Supply of Labor

The total number of potential workers available to perform work in an economy, determined by factors like demographics, labor market conditions, and immigration policies.

Unions

Organizations that represent the collective interests of workers, bargaining with employers on their behalf for better wages, working conditions, and benefits.