If the lease term must be greater than or equal to ________, the lessee will record the lease as a capital lease.
A) 50% of the expected economic life of the leased property
B) 75% of the expected economic life of the leased property
C) 80% of the expected economic life of the leased property
D) 90% of the expected economic life of the leased property

Question

Quizplus · Accepted Answer

According to the criteria for capital leases under the previous accounting standards (ASC 840), one of the conditions is that the lease term is equal to or greater than 75% of the expected economic life of the leased property.

If the Lease Term Must Be Greater Than or Equal