Firms having significant operating leases must disclose their commitments to pay for these leases in a footnote listing the payments to be made:
A)in total.
B)in total and over the next 3 years.
C)in total and over the next 5 years.
D)over the next 5 years.

Question

Quizplus · Accepted Answer

According to ASC 840 (now superseded by ASC 842), firms are required to disclose their commitments to pay for significant operating leases in a footnote listing the payments to be made over the next five years. Therefore, choice C is the best option as it reflects the requirement of the accounting standard.

Firms Having Significant Operating Leases Must Disclose Their Commitments to Pay