Question

There are two type of leases in accounting explain them and mention the GAAP criteria to...

There are two type of leases in accounting explain them and mention the GAAP criteria to consider the lease as capital “finance” lease explain them in details.

  

1-Explain the difference between the operating lease and capital lease accounting wise? [Marks 6]

2--How much is the operating lease obligation in total?

3-according to FASB there are three level hierarchy for the fair value measurement technique explain them? Mention example from the balance sheet for asset and liabilities that were measured at fair value for each level if available.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. Operation lease: In operating lease all the risks and rewards related to asset ownership will remain with the lessor. In terms of accounting, installments of operating lease are expenses and are debited in profit and loss statement

Capital lease: In capital lease the risks and rewards related to ownership of asset are transferred to the lessee. In terms of accounting treatment, unlike operating leases, capital lease is treated like Loan and the payments are treated as assets to be shown in balance sheet

Details regarding 2 and 3 are missing to get answered.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
   1-Explain the difference between the operating lease and capital lease accounting wise? 2--How much is...
   1-Explain the difference between the operating lease and capital lease accounting wise? 2--How much is the operating lease obligation in total? 3-according to there are three level hierarchy for the fair value measurement technique explain them?
International Accounting Standards (IFRS) 16 Leases standardizes the accounting treatment and disclosure requirements of assets held...
International Accounting Standards (IFRS) 16 Leases standardizes the accounting treatment and disclosure requirements of assets held under lease. The approach to lessor accounting classifies leases into two types, Operating lease and Finance lease. Required: Discuss any five indications that may provide evidence that a particular lease agreement may be: An operating lease                                                                  A finance lease                                                                       Briefly explain the effect of treating a finance leased asset as though it was an operating leased asset on assets, liabilities, ROCE and Gearing ratios....
Below are three lease transactions for VNN Airways in 20XX as the Lessee. All leases start...
Below are three lease transactions for VNN Airways in 20XX as the Lessee. All leases start on 1/1/XX. Lessors BJN Leasing CMN Leasing BVC Leasing Type of property 787 Aircraft 727 Aircraft L-1011 Aircraft Yearly rental $7,445,064 $5,449,423 $2,851,861 Lease term 15 years 15 years 20 years Estimated economic life 25 years 25 years 25 years Fair market value of leased asset $69,300,000 $54,000,000 $32,000,000 Present value of the rental payments $63,000,000 $46,000,000 $28,000,000 Purchase price at end of lease...
Assess the proper accounting for transactions with respect to deferred taxes and leases using the accounting...
Assess the proper accounting for transactions with respect to deferred taxes and leases using the accounting codification and other accounting research tools. Scenario CM Corporation (CMC) was founded six years ago by Phil Connor and Eric Martin. The company designs, installs, and services security systems for high-tech companies. The founders, who describe themselves as "entrepreneurial geeks," met in a computer lab when they were teenagers and found they had common interests in working on security systems for critical industries. CMC...
The Volkswagen Group adopted International Accounting Standards (IAS, now International Financial Reporting, or IFRS) for its...
The Volkswagen Group adopted International Accounting Standards (IAS, now International Financial Reporting, or IFRS) for its 2001 fiscal year. The following is taken from Volkswagen’s 2001 annual report. It discusses major differences between the German Commercial Code (HGB) and IAS as they apply to Volkswagen. General: In 2001 VOLKSWAGEN AG has for the first time published its consolidated financial statements in accordance with International Accounting Standards (IAS) and the interpretations of the Standing Interpretations Committee (SIC). All mandatory International Accounting...
Background You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting...
Background You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All of those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas...
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm...
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All of those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas competitors....
1- Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer...
1- Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer to leave their cash outside the United States because using those funds to pay dividends or purchase treasury stock would Select one: a. promote foreign investment. b. require a big U.S. corporate income tax payment. c. create pressure for decreased exporting. d. decrease foreign exchange. e. inflate stock prices. 2- In projected financial statements, what is used as a plug figure? Select one: a....
During the trial, lawyers for the accused said that the men believed that the accounting decisions...
During the trial, lawyers for the accused said that the men believed that the accounting decisions they made were appropriate at the time, and that the accounting treatment was approved by Nortel’s auditors from Deloitte & Touche. Judge Marrocco accepted these arguments. Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio (i.e., Dunn, Beatty, and Gollogly) had “deliberately misrepresented” financial results. Given the facts of the case, do you believe Judge Marrocco’s decision was justified? Explain....
Telco Ltd. is a Danish telecom company that prepares consolidated financial statements in full compliance with...
Telco Ltd. is a Danish telecom company that prepares consolidated financial statements in full compliance with IFRS 10. The company has expanded dramatically in Central Asia in recent years by investing in three units: K-Mobe, U-Mobe, and T-Mobe, supplying cellular service to customers in Kazakhstan, Uzbekistan, and Tajikistan, respectively. page 155Telco’s corporate investment policy is to take majority ownership stakes in overseas subsidiaries when possible, but to accept lower levels of ownership when majority ownership is not possible or practical....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT