alleryStart learning →A secondary period at a rent far below market rent is an indicator that the lease is
AA finance lease
BAn operating lease
CA short-term licence
DA cancellable lease
Answer & Solution
Correct answer: A. A finance lease
A substantially below-market secondary rent shows the lessee keeps the benefits, an indicator of a finance lease.
Keep practising AS 19 Leases
Browse all AS 19 Leases questions for CA Inter, or explore more Accounting topics.
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