Which of the following would be excluded from both the minimum lease payments and net lease liability at inception for the lessee?
A)Bargain purchase option.
B)Annual lease payments
C)Lessee guarantee of residual.
D)Third party guarantee of residual.

Question

Quizplus · Accepted Answer

The third party guarantee of residual value is excluded from both the minimum lease payments and the net lease liability at inception for the lessee because it is a guarantee provided by an external party, not the lessee. This means the lessee does not bear the risk associated with the residual value at the end of the lease term, and therefore, it does not impact their lease calculations.

Which of the Following Would Be Excluded from Both the Minimum