From the lessee’s perspective, when should a residual value be included in the present value calculation of the right-of...
From the lessee’s perspective, when should a residual value be included in the present value calculation of the right-of-use asset and the lease liability?
A. always include the residual value, regardless of whether it is guaranteed.
B. only include the value of the expected payment when the residual is guaranteed and the expected value is less than the guaranteed residual value.
C. only include the full residual value when it is guaranteed, and there is no expected payment at lease end (expected value is greater than the guaranteed residual value).
D. never include the residual value or the expected payment, regardless of whether it is guaranteed.
Homework Answers
From the lessee’s perspective, a residual value shall be included in the present value calculation of the right-of-use asset and the lease liability:
B.only include the value of the expected payment when the residual is guaranteed and the expected value is less than the guaranteed residual value.
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residual value [LO15-2, 15-6]
Each of the four independent situations below describes a
finance lease in which annual lease payments are payable at the
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implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1,
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Each of the four independent situations below describes a
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