Beginning in 2019, operating leases will be recorded:
A) only on the books of the lessor.
B) only on the income statement of the lessee as each lease payment is expensed.
C) as an asset on the balance with a value equal to the estimated residual value of the leased asset.
D) in the footnotes rather than on the balance sheet.
E) on the balance sheet of the lessee.

Question

Quizplus · Accepted Answer

Beginning in 2019, operating leases must be recorded as a right-of-use asset and a corresponding liability on the balance sheet of the lessee under the new accounting standards ASC 842. This change is made to reflect the lessee's obligation to make lease payments over the lease term.

Beginning in 2019, Operating Leases Will Be Recorded