USGAAP and IFRS Provide Criteria for Distinguishing Operating Leases from Capital

question 145

Multiple Choice

U.S.GAAP and IFRS provide criteria for distinguishing operating leases from capital leases.Which of the following is/are not true?

• A)U.S.GAAP provides four criteria, any one of which qualifies a lease as a capital lease.
• B)IFRS provides general criteria for identifying the entity enjoying the rewards and incurring the risk.
• C)Firms can currently apply the fair value option to capital leases.
• D)The FASB and the IASB have undertaken a joint project involving the lessee's accounting for leases which may result in treating all leases as capital leases.
• E)all of the above

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Definitions:

Axle Tracking

The alignment of axles to ensure that they are parallel to each other and perpendicular to the central line of the vehicle for optimal performance.

Kingpin Flag Assembly

A crucial component in the steering mechanism of heavy vehicles, connecting the axle to the wheel assembly.

Upper Coupler Plate

A component at the front of a semi-trailer that rests on the fifth wheel of a tractor, helping to distribute the trailer's load.

Tie-rod Ends

Components of the steering mechanism in a vehicle that serve as pivot points between the tires and the steering system, facilitating direction change.