When the terms of a lease require that the lessee record an asset and a liability,the two accounts are recorded at the present value of the total lease payments required.

Question

Quizplus · Accepted Answer

This is because the present value of the total lease payments represents the fair value of the asset and the liability at the inception of the lease. This approach is consistent with the requirements of accounting standards such as ASC 842 and IFRS 16.

When the Terms of a Lease Require That the Lessee