alleryStart learning →A lessee books the lower of fair value and the PV of
AUnguaranteed residual value
BIts minimum lease payments
CThe lessor's gross investment
DContingent rent receivable
Answer & Solution
Correct answer: B. Its minimum lease payments
The lower of fair value and present value of the lessee's minimum lease payments is the recognised amount.
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