In relation to finance leases,the following information must be disclosed separately in the financial statements of lessors:
I Unearned finance income.
II Contingent rents recognised as income in the period.
III The unguaranteed residual values accruing to the benefit of the lessee.
IV The accumulated allowance for uncollectible minimum lease payments receivable.
A)I,II and IV only
B)I,III and IV only
C)II,III and IV only
D)II and IV only.

Question

Quizplus · Accepted Answer

I is correct as unearned finance income is the finance income that is recognised over the lease term and is yet to be earned by the lessor. 
II is correct as contingent rents are recognised as income in the periods when they become due. 
IV is correct as accumulated allowance for uncollectible minimum lease payments receivable is the provision created by the lessor to cover any potential credit losses on the lease receivable. 
III is not correct as unguaranteed residual values accrue to the benefit of the lessor, not the lessee, and do not need to be separately disclosed on the financial statements.

In Relation to Finance Leases,the Following Information Must Be Disclosed