When is a lease recognized as an operating lease under ASPE?
A) if it is of low-value to the corporation
B) if it is less than one year
C) if it doesn't meet the criteria of a capital lease
D) if the company elects to record as an operating lease

Question

Quizplus · Accepted Answer

ASPE identifies the criteria for recognizing leases as operating or capital leases. If a lease doesn't meet the criteria of a capital lease, it will be recognized as an operating lease. The classification of a lease as an operating or capital lease is based on the substance of the transaction, rather than its legal form.

When Is a Lease Recognized as an Operating Lease Under