Which of the following is not a condition requiring the use of the finance lease reporting method?
A) The lease transfers ownership of the leased asset from the lessor to the lessee at the termination of the lease.
B) The lease term is a major part of the remaining estimated economic useful life of the leased asset.
C) The lease allows the lessee to use the leased asset during the lease term.
D) The lease provides that the lessee can purchase the leased asset and the lessee is reasonably certain to exercise the option.

Question

Quizplus · Accepted Answer

Option C is incorrect because simply allowing the lessee to use the leased asset during the lease term is a basic characteristic of all leases, not a specific condition that requires the use of the finance lease reporting method. Options A, B, and D describe specific conditions that, if met, typically require the lessee to account for the lease as a finance lease.

Which of the Following Is Not a Condition Requiring the Use