A direct financing capital lease results in a manufacturers or dealers profit or loss and meets one or more of the capitalization criteria and both of the recognition criteria.

Question

Quizplus · Accepted Answer

A direct financing lease does not result in a manufacturer's or dealer's profit or loss; it is typically used by lessors who are not manufacturers or dealers and involves the transfer of substantially all risks and rewards of ownership without immediate profit recognition.

A Direct Financing Capital Lease Results in a Manufacturers or Dealers