Which of the following statements is true?
A) The right-of-use asset is increased by prepaid lease payments, but reduced by lease incentives and the lessee's initial direct costs.
B) The right-of-use asset is increased by prepaid lease payments and the lessee's initial direct costs, but reduced by lease incentives.
C) The right-of-use asset is reduced by the lessee's initial direct costs, but increased by lease incentives and prepaid lease payments.
D) The right-of-use asset is reduced by prepaid lease payments and the lessee's initial direct costs, but increased by lease incentives.

Question

Quizplus · Accepted Answer

The right-of-use asset is initially measured by including prepaid lease payments and the lessee's initial direct costs, while lease incentives reduce the asset's value.

Which of the Following Statements Is True