All of the following statements are true except:
A) The criteria to determine whether a lease contract should be considered a capital lease are applied in a more rigid way under U.S.GAAP than IFRS.
B) The criteria to determine whether a lease contract should be considered a capital lease are applied in a more rigid way under IFRS than U.S.GAAP.
C) The lease criteria under IFRS are to be used as guidelines rather than rules.
D) IFRS requires more accounting judgment than U.S.GAAP in the determination of whether a lease is classified as an operating lease or a capital lease.

Question

Quizplus · Accepted Answer

The statement in option B is not true, as the criteria for determining whether a lease contract should be considered a capital lease are applied in a more rigid way under U.S.GAAP than IFRS. Option A is true, as U.S.GAAP has specific quantitative tests for lease classification that must be met, while IFRS has more qualitative tests. Option C is partially true, as the lease criteria under IFRS are more principles-based and allow for judgment, but there are still specific criteria that must be met. Option D is true, as IFRS requires more accounting judgment and assessment of the lease terms to determine classification, while U.S. GAAP relies more on specific quantitative tests.

All of the Following Statements Are True Except