For a lessor to classify a lease as a capital lease, there can be no material uncertainties regarding the amount of reimbursable costs to be incurred by the lessee.

Question

Quizplus · Accepted Answer

A lessor classifies a lease as a capital lease based on criteria such as transfer of ownership, bargain purchase option, lease term, and present value of lease payments, not on uncertainties about reimbursable costs.

For a Lessor to Classify a Lease as a Capital