What are two components of the lease liability that are measured in terms of net present value?

Question

Quizplus · Accepted Answer

The two components of the lease liability that are measured in terms of net present value are the expected guaranteed residual value and variable payments (indexed). This is because these components are uncertain and need to be discounted to their present value in order to accurately measure the lease liability. Option A includes the expected guaranteed residual value and the estimated cost of dismantling and restoring the asset, but the latter is not measured in terms of net present value. Option C includes the termination penalty if reasonably certain and the lessee's initial direct costs, but only the latter is measured in terms of net present value. Option D includes the lessee's initial direct costs and the payment at or before commencement date less any incentives received, but neither of these components are uncertain and need to be discounted to their present value.

What Are Two Components of the Lease Liability That Are