Which of the following is defined in the lease contract between the lessor and the lessee?

Question

Quizplus · Accepted Answer

The time period for which the lessee can use the asset is a key aspect of the lease contract and is explicitly defined in the agreement. Depreciation methods may be prescribed by accounting standards or chosen by the lessee, but they are not necessarily determined in the lease contract. Whether to expense or capitalize the lease is a decision made by the lessee based on the terms of the lease and accounting standards. The retention ratio of the firm is not relevant to the lease contract.

Which of the Following Is Defined in the Lease Contract