A lease with high payments early in its life which then decline to termination would:
A)provide greater cashﬂow to the lessee in the beginning years.
B)be evidence of tax avoidance and not acceptable to the tax authorities.
C)be qualiﬁed as a capital lease under IFRS.
D)provide a lower residual value and thus ensure a bargain-purchase price option.
E)All of the above.

Question

Quizplus · Accepted Answer

A lease with high payments early on may be seen as an attempt to manipulate tax liabilities, which could be scrutinized by tax authorities for tax avoidance.

A Lease with High Payments Early in Its Life Which