How are operating leases reported in the lessee's financial statements?
I. As an asset that is depreciated, similar to the company's other assets
II. As a footnote disclosure
III. As either a short-term or long-term liability, depending on the length of the lease
A) I and II
B) II and III
C) I only
D) II only

Question

Quizplus · Accepted Answer

Operating leases are not reported on a company's balance sheet. They are noted in the footnotes to the financial statements, which provide key details regarding the company's current and future lease payment obligations.

How Are Operating Leases Reported in the Lessee's Financial Statements