To be classified as a finance lease by the lessee, no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor may exist.

Question

Quizplus · Accepted Answer

The classification of a finance lease by the lessee is not dependent on the uncertainties surrounding unreimbursable costs incurred by the lessor. Instead, it is based on whether the lease transfers substantially all the risks and rewards of ownership to the lessee.

To Be Classified as a Finance Lease by the Lessee