Which of the following are specific tests that the Canada Revenue Agency will apply to determine if a particular lease meets the definition of a capital lease? The lease term is equal to 75% or more of the economic life of the leased property.
The present value of the minimum lease payments is equal to 70% or more of the fair value of the leased property at the inception of the lease.
Provisions are made such that ownership of the leased property is transferred to the lessee at the end of the lease term.
A)1 only
B)1 and 2
C)1 and 3
D)2 and 3

Question

Quizplus · Accepted Answer

The Canada Revenue Agency considers a lease to be a capital lease if it meets certain criteria, including if the lease term is equal to 75% or more of the economic life of the leased property, and if there are provisions for the transfer of ownership to the lessee at the end of the lease term.

Which of the Following Are Specific Tests That the Canada