Initial direct costs include lessor costs incurred:
A)after obtaining the commitment of a potential lessee to enter into a lease contract
B)before and after obtaining the commitment of a potential lessee to enter into a lease contract
C)before obtaining the commitment of a potential lessee to enter into a lease contract
D)for the purpose of upgrading an existing lease contract

Question

Quizplus · Accepted Answer

Initial direct costs include costs that are incurred by the lessor after obtaining the commitment of a potential lessee to enter into a lease contract. These costs are directly attributable to negotiating and arranging the lease.

Initial Direct Costs Include Lessor Costs Incurred