The initial direct costs cannot be deferred and the lessor must expense initial direct costs at the lease commencement.

Name: The initial direct costs cannot be deferred and the lessor must expense initial direct costs at the lease commencement.
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Initial direct costs can be deferred and capitalized by the lessor as part of the lease asset, rather than expensed immediately at the lease commencement.

The Initial Direct Costs Cannot Be Deferred and the Lessor