Under the Provisions of ASU 2016-02,in the Event a Lease

question 18

Multiple Choice

Under the provisions of ASU 2016-02,in the event a lease does not qualify as a sales-type lease by a leaser,which of the following is not a criterion to be met to qualify the lease as a direct financing lease?

• A)The present value of the sum of lease payments and any residual value guaranteed by the lessee that is not already reflected in lease payments and/or any other third party unrelated to the lessor equals or exceeds substantially all of the fair value of the underlying asset
• B)It is probable that the lessor will collect the lease payments plus any amount necessary to satisfy a residual value guarantee
• C)The lease transfers ownership of the underlying asset to the lessee by the end of the lease term
• D)All leases that do not qualify as sales type leases for lessor are recorded as direct financing leases.

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