Auditors often recalculate the present value of capital lease agreements to assess whether the relevant criteria for capitalizing the lease have been met.

Question

Quizplus · Accepted Answer

This statement is true. Auditors may recalculate the present value of capital lease agreements to determine whether the criteria for capitalizing the lease have been met, such as whether the lease term is for a major part of the leased asset's useful life or whether the present value of lease payments exceeds a certain threshold.

Auditors Often Recalculate the Present Value of Capital Lease Agreements