alleryStart learning →Lease terms change (not renewal) so the original classification would have differed. The revised agreement is treated as
AContingent rent
BA new agreement
CRestated earlier
DLeft as before
Answer & Solution
Correct answer: B. A new agreement
A classification-changing revision is treated as a fresh agreement running over the revised term.
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