ARB 38 recommended that where it was obvious a lease contract was in substance a purchase, an asset, but not a liability, should be recognized in the lessee's balance sheet.

Question

Quizplus · Accepted Answer

ARB 38 did not make such a recommendation; it was actually SFAS No. 13 (Accounting Standards Codification Topic 840) that introduced the concept that if a lease meets certain criteria making it a capital lease (indicating ownership characteristics), both an asset and a liability should be recognized on the lessee's balance sheet.

ARB 38 Recommended That Where It Was Obvious a Lease