Which of the following is a reason why lease accounting under GAAP should be reconsidered?
A)It is too easy for firms to circumvent lease capitalization criteria.
B)The SEC has stated that the FASB should reexamine lease accounting.
C)Operating leases are a popular means of off-balance sheet financing.
D)Each of the above are substantiated reasons.

Question

Quizplus · Accepted Answer

All of the options presented are substantiated reasons for why lease accounting under GAAP should be reconsidered. Firms can easily exploit the criteria for lease capitalization, the SEC has directly suggested that lease accounting be reexamined, and operating leases provide an avenue for off-balance sheet financing.

Which of the Following Is a Reason Why Lease Accounting