A lessor must be a manufacturer or dealer to realize a profit (or loss) at the inception of a lease that requires application of sales-type lease accounting.

Question

Quizplus · Accepted Answer

A lessor does not need to be a manufacturer or dealer to realize a profit or loss at the inception of a lease that requires application of sales-type lease accounting. Any lessor can recognize profit or loss at the inception of a sales-type lease based on the difference between the fair value of the leased asset and its carrying amount, regardless of whether they are a manufacturer or dealer.

A Lessor Must Be a Manufacturer or Dealer to Realize