Of the five criteria for a finance lease, which one is not applied if the lease...
Of the five criteria for a finance lease, which one is not applied if the lease begins ”at or near the end” of the economic life of the underlying asset?
Multiple Choice
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A)The passage of title criteria.
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B)The economic life test.
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C)A purchase option is reasonably certain to be exercised.
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D)The present value of lease payments greater or equal to substantially all of fair value test.
Homework Answers
| The economic life test is not applied if the lease begins ”at or near the end” of the economic life of the underlying asset. |
| As the lease begins near the end of the economic life of the underlying asset, the economic life test is not applied. |
| Option B is correct |
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