The initial direct costs of leasing
A) are generally borne by the lessee.
B) include incremental costs related to internal activities of leasing, and internal costs related to costs paid to external third parties for originating a lease arrangement.
C) are expensed in the period of the sale under a sales-type lease.
D) All of the answers are true with regard to the initial direct costs of leasing.

Question

Quizplus · Accepted Answer

Initial direct costs are expensed in the period of the sale under a sales-type lease, as they are directly associated with the execution of the lease.

The Initial Direct Costs of Leasing