Under ASPE, if land is the sole property being leased, and title does NOT transfer at the end of the lease, it should be accounted for as a(n)
A) operating lease.
B) capital lease.
C) sales-type lease.
D) direct-financing lease.

Question

Quizplus · Accepted Answer

This would be classified as an operating lease since there is no transfer of title at the end of the lease. In an operating lease, the lessee does not assume the risks and rewards of ownership, and the lease payments are treated as operating expenses.

Under ASPE, If Land Is the Sole Property Being Leased