Under the provisions of ASC 842, which of the following is not required in a lease modification when the lease payments are required to be remeasured?
A) Any variable lease payments that are based on a rate or index will need to be remeasured.
B) The total lease liability is remeasured
C) The remeasured lease must be subsequently recorded as an operating lease
D) The lessee is generally required to use an updated discount rate.

Question

Quizplus · Accepted Answer

Under ASC 842, when lease payments are required to be remeasured, the lessee must remeasure the lease liability based on the updated cash flows and use an updated discount rate. In addition, any variable lease payments that are based on a rate or index will need to be remeasured. However, the lease does not need to be subsequently recorded as an operating lease. The lease classification remains the same as it was before the modification.

Under the Provisions of ASC 842, Which of the Following