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Question
1. Five payments of $26,379.74 (a 9% implicit rate) due at the end each year.2. The fair value of the tractor is $100,000.
3. The lease is nonrenewable and the tractor reverts to Star at the end of the lease term.
4. The tractor has a six-year economic life.
5. Hatfield has an excellent credit rating.
6. Star offers no warranty on the tractor other than the manufacturer's two-year warranty that is handled directly with the manufacturer.
Under IFRS
A. Disclosure of lessee future minimum lease payments for the periods within one year, within years two through five, and after five years are required.
B. Lessees can classify some assets held under leases as investment property.
C. The two additional lessor criteria provided under U.S. GAAP for lease revenue recognition are absent.
D. All of the choices are correct.
Answer
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