Land leases are capitalized only if title passes to the lessee at the end of the lease term and the lease contract contains a bargain purchase option.

Question

Quizplus · Accepted Answer

Land leases can be capitalized if they meet certain criteria under accounting standards such as the transfer of ownership at the end of the lease term or if the lease term is for a major part of the economic life of the asset, among others, not solely on the conditions mentioned.

Land Leases Are Capitalized Only If Title Passes to the Lessee