Session 9: Financial Reporting and Analysis: Inventories, Long-lived Assets, Income Taxes, and Non-current Liabilities
Reading 39: Non-current (Long-term) Liabilities
LOS f: Discuss the motivations for leasing assets instead of purchasing them.
As compared to purchasing an asset, which of the following is least likely an incentive to structure a transaction as a finance lease?
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A) |
Risk of obsolescence is reduced because the asset is returned to the lessor. | |
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B) |
The lease enhances the balance sheet by the lease liability. | |
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C) |
The terms of the lease can be negotiated to better meet each party's needs. | |
Operating leases enhance the balance sheet by excluding the lease liability. With a finance lease, an asset and a liability are reported on the balance sheet just like a purchase made with debt. | 
发表于 2011-3-22 11:27
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