Under U.S.GAAP,which of the following items would require a lessee to classify a lease of equipment as a capital lease?
A) There is no transfer of ownership to the lessee at the end of the lease term.
B) The lease does not contain a bargain purchase option.
C) The lease term is 90% of the estimated economic life of the lease property.
D) The present value of the contractual minimum lease payments is 75% of the fair value of the leased property.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, a lease is classified as a capital lease if it meets any one of the following criteria: transfer of ownership, bargain purchase option, lease term is 75% or more of the economic life, or present value of lease payments is 90% or more of the fair value. Option C meets the lease term criterion.

Under USGAAP,which of the Following Items Would Require a Lessee to to Classify