If the Present Value of the Lease Payments Is 90

question 72

Multiple Choice

If the present value of the lease payments is 90% or more of the market value of the leased asset, the:

• A) lease is not cost-effective and should be cancelled.
• B) lease may be classified as an operating lease.
• C) one of the criteria is met for the lease to be considered a capital lease.
• D) lease may be recorded off-balance sheet.

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Definitions:

Transgression

A geological event where the sea advances over land due to rising sea levels or subsiding land, leading to the deposition of marine sediments over terrestrial ones.

Marine Sedimentary Facies

Specific areas within sedimentary deposits in marine environments characterized by a distinct set of physical, chemical, and biological attributes.

Limestone

A sedimentary rock composed mainly of calcite, formed by the accumulation of shell, coral, algal, and fecal debris in shallow seas.

Shoreline Environment

The area where land meets a body of water, characterized by unique ecological and geological features.