alleryStart learning →A lease term covering the major part of the asset's economic life points to
AAn operating lease
BA service contract
CA sale and leaseback
DA finance lease
Answer & Solution
Correct answer: D. A finance lease
A term for the major part of economic life normally indicates a finance lease whether or not title passes.
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Related questions
Leaving a finance lease off the lessee's balance sheet understates obligations and distortFor a lessee, the amount of a residual value guarantee is theA lessor on finance leases also discloses accumulated provision forWhich must a lessor disclose for finance leases?In a finance leaseback, the carrying amount is written down only if there isLeaseback below fair value, loss offset by cheap rentals, isAsset sold at fair value Rs 6 lakh, carrying amount Rs 8 lakh, operating leaseback. Loss rOperating leaseback above fair value: the excess is