The useful life of the equipment is 4 years.The lease should be treated as an operating lease because:It does not transfer the ownership to lessee at the end of the lease term; The lease term is only half the total useful life of the asset; The present value of lease payments is ...
When it comes to analyzing operating expenses, managers classify the expenses as eitherfixed or variable. In such a way, a manager can better understand the nature of the expense. A fixed cost remains the same no matter what the production level is, while variable cost does vary with the nu...
GAAP rules state that to determine whether the lease is an operating lease, the lease must not have any of these characteristics: 1. The life of the lease must not be longer than 75% of the life of the asset. 2. The lessor cannot transfer ownership of the asset to the lessee at the...
Lease payment is one of the major factors to decide the type of lease, operating lease, or finance lease. For example: A lease is a finance lease where the Present value of Lease Rentals is equal or approximate to the fair value of the asset. Benefits Below are some of the benefits of...
A. Operating lease B. Debenture bonds C. Current portion of long-term debt D. Convertible bonds 相关知识点: 试题来源: 解析 A 正确答案:A 解析:答案为A项。current portion of long-term debt,CPLTD“长期债务中一年内到期的部分”。本题中除A项所指的“经营性租赁”属于表外融资,其余选项的三种融资...
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2. Operating Lease An operating lease means a lease other than afinance lease. The duration of the operating lease is much less than the useful life of the asset, and the asset owner retains the risks and rewards of the ownership of the asset. ...
GAAP groups all leases into one of two main categories: operating or capital leases. Operating leases are accounted for simply expensing the lease payments just like a company would do with rent expense.Each month the lessee will record a rent payment as an expense. Capital leases, on the ...
Analyst should consider several off- balance sheet items such as operating lease, certain pension obligations to get the full picture of long-term obligation. Finally, this ratio should be looked at in conjunction with several other leverage ratios to get a holistic view on the financial riskiness...
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