The Key Difference Between ASU 2016-02 and SFAS No

question 26

Multiple Choice

The key difference between ASU 2016-02 and SFAS No.13 in accounting for leases by lessees is

• A)The recognition of a right‐to‐use asset ROU)and lease liability on the statement of financial position for those leases previously classified as operating leases under SFAS No.13
• B)Leases will be measured at their fair value by lessees
• C)The classification of a lease as a finance by a lessee is based on a completely new set of criteria than was used in SFAS No.13.
• D)There are no major differences between the two standards in accounting for leases by lessees.

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Definitions:

Employee Rights

Legal or ethical entitlements associated with employment, including fair pay, safe working conditions, and freedom from discrimination or harassment.

Discrimination

Unfair or prejudicial treatment of individuals based on characteristics such as age, gender, race, or religion.

Hire-At-Will

An employment arrangement where the employer or the employee can terminate the employment at any time, without any requirement of notice or reason, unless it violates state or federal law.

Ethical Dilemma

A situation in which a person must choose between morally conflicting decisions or principles.