In the government-wide financial statements, the assets acquired under a capital lease would be reported at the total of all payments required under the lease. the present value of the required lease payments. the undiscounted total of required lease payments. they are not reported in the government-wide financial statements.

In the government-wide financial statements, the assets acquired under a capital lease would be reported at the total of all payments required under the lease. the present value of the required lease payments. the undiscounted total of required lease payments. they are not reported in the government-wide financial statements.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 12QE

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Which of the following statements regarding the calculation of the lessee's amortization expense for a finance lease is true? A. The guaranteed residual value is included in the measurement of the right-of-use asset to be amortized only to the extent that is likely to be owed. B. The guaranteed residual value is not included in the measurement of the right-of-use asset to be amortized. C. The unguaranteed residual value is included in the measurement of the right-of-use asset to be amortized. D. The bargain purchase option price is never included in the measurement of the right-of-use asset to be amortized.
Explain how an entity would initially and subsequently measure its right-of-use asset and lease liability if the leased asset is classified as investment property under the fair value model? Assuming the fair value of the asset is not given at the end of the period, how will it be best computed? Compare and contrast the lease-related expenses if the entity uses the cost model and fair value model for its right-of-use asset.
Explain the adjustments necessary to convert to a government-wide statement of activities, assuming all expenditures are for capital assets and other finance sources are the result of issuance of general long-term obligations.
At the inception of a finance lease, the guaranteed residual value should be Included at present value as part of the lease payments Included at undiscounted value as part of the lease payments. Ignored by the lessee in computing the lease payments Included at present value as part of the lease payments only to the extent that it exceeds the expected residual value
Which of the following is not one of the procedures for accounting by the lessee for a decrease in lease scope? Decrease in the right of use asset equal to that of the peso decrease in finance lease liability to reflect decrease in scope both are required accounting procedures Adjustment of the decreased finance lease liability to the present value of future lease payments both are not required accounting procedures
The amount to be recorded as the cost of an asset under a finance lease is equal to the present value of the lease payments. carrying value of the asset on the lessor's books. present value of the lease payments plus the present value of any unguaranteed residual value. present value of the lease payments or the fair value of the asset, whichever is lower.
For a lease that transfers ownership of the property to the lessee by the end of the lease term, the lessee should: a.amortize the right-of-use asset over the economic life of the asset in a manner consistent with the lessee's normal depreciation policy for owned assets b.amortize the right-of-use asset over the lease term in a manner consistent with the lessee's normal depreciation policy for owned assets c.record each lease payment as lease expense d.combine interest expense and amortization expense and report as a single lease expense
Which of the following statements is/are not true? Interest expense on the lease liability will increase the carrying amount of the liability. A lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date, using the lessee's incremental borrowing rate. Right-of-use asset cost will include an estimates cost to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Group of answer choices Only statement 2. All statements are true. Only statements 2 and 3. None of the statements are true.
Describe reporting issues related to leases,postretirement benefits, and deferred taxes.
Which of the following is classified under PAS 16 - -Investment Property -Property Sold under a Finance Lease Agreement -Machinery Held under a low value Lease Agreement -Property Leased under a Finance Lease Agreement
For a depreciable asset, the amount of depreciation recognised shall be in accordance with AASB 116. The asset shall be: a fully depreciated over the shorter of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term. b fully depreciated over the shorter of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term. c fully depreciated over the longer of the lease term and its useful life, if there is a reasonable certainty that the lessee will obtain ownership by the end of the lease term. d fully depreciated over the longer of the lease term and its useful life, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term.
Laster City recorded a 20-year building rental agreement as a capital lease. An asset for the building lease was recorded in the general fixed assets account group. Where should the lease liability be reported?a. In the general long-term debt account groupb. In the debt service fundc. In the general fundd. A lease liability should not be reported.