The Major Difference Between ASU 2016-02 and IFRS No

question 16

Multiple Choice

The major difference between ASU 2016-02 and IFRS No. 16 is

• A) All leases must be recorded as finance leases by lessees under ASU 2016-02; whereas, some leases may be recorded as operating leases by lessees under IFRS No. 16.
• B) All leases must be recorded as finance leases by lessees under IFRS No. 16; whereas, some leases may be recorded as operating leases by lessees under ASU 2016-02
• C) All leases must be recorded as finance leases by lessors under ASU 2016-02; whereas, some leases may be recorded as operating leases by lessors under IFRS No. 16
• D) All leases must be recorded as finance leases by lessors under IFRS No. 16; whereas, some leases may be recorded as operating leases by lessors under ASU 2016-02.

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Definitions:

Notes Payable

Financial obligations represented by written promissory notes that specify the terms under which a borrower agrees to repay a lender.

Owner's Capital

Represents the total equity of the owner in a business, which consists of the initial and additional investments minus any withdrawals.

18-Month Insurance

This term refers to a prepaid insurance policy that covers a period of 18 months, recognized as an asset initially and expensed over the duration of the coverage.

Weekly Payroll

The total sum of all employee earnings paid on a weekly basis.