At inception of the lease,what is the cost basis of an asset acquired from a lease arrangement when the lease is classified as a finance lease?

Question

Quizplus · Accepted Answer

The cost basis of an asset acquired from a lease arrangement is the lower of fair value of the leased asset or present value of the minimum lease payments plus any initial indirect costs when the lease is classified as a finance lease. This is in accordance with International Financial Reporting Standards (IFRS 16) and Generally Accepted Accounting Principles (GAAP).

At Inception of the Lease,what Is the Cost Basis of an Asset