Under ASPE, a lessor may classify a lease as a finance lease if:
A)Either the credit risk relating to the lease and lessee are normal OR the lessor's unreimbursable costs can be reasonably estimated in order to meet the finance lease criteria under ASPE.
B)Both the credit risk relating to the lease and lessee are normal AND the lessor's unreimbursable costs can be reasonably estimated in order to meet the finance lease criteria under ASPE.
C)The lessor's unreimbursable costs can be reasonably estimated.
D)The credit risk relating to the lease and lessee are normal.

Question

Quizplus · Accepted Answer

Under ASPE, for a lease to be classified as a finance lease by the lessor, both conditions must be met: the credit risk relating to the lease and lessee must be normal, and the lessor's unreimbursable costs must be reasonably estimated. This ensures that the lessor can reliably predict the economic benefits that will flow from the lease, which is a key criterion for finance lease classification.

Under ASPE, a Lessor May Classify a Lease as a Finance