The key difference between ASC 842 and SFAS No. 13 in accounting for leases by lessees is
A) The recognition of a right‐to‐use asset (ROU) and lease liability on the statement of financial position for those leases previously classified as operating leases under SFAS No. 13
B) Leases will be measured at their fair value by lessees
C) The classification of a lease as a finance by a lessee is based on a completely new set of criteria than was used in SFAS No. 13.
D) There are no major differences between the two standards in accounting for leases by lessees.

Question

Quizplus · Accepted Answer

Under ASC 842, lessees must recognize a right-to-use asset and lease liability on their financial statements for leases that were previously classified as operating leases under SFAS No. 13. This is a significant difference from the previous standard, as it requires lessees to recognize and report these lease-related assets and liabilities on their balance sheets.

The Key Difference Between ASC 842 and SFAS No