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1. An IFRS-reporting airline leases a new airplane from its manufacturer...

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Accounting

1. An IFRS-reporting airline leases a new airplane from its manufacturer for ten years. For financial reporting, the airline:
a. must disclose the present value of the future lease payments if it classifies the lease as an operating lease.
b. will only record an asset and a liability on its balance sheet if it classifies the lease as a finance lease.
c. must record an asset and a liability on its balance sheet.
2.For a lessor that reports under U.S. GAAP, a lease is classified as an operating lease if:
a. the fair value of the asset is greater than the sum of the lease payments and the assets expected residual value.
b. ownership risks are not substantially transferred to the lessee.
c. it cannot be classified as a sales-type lease or a direct financing lease.
3. Under IFRS, a lessor retains the leased asset on its balance sheet for:
a. operating leases, but not finance leases.
b. finance leases, but not operating leases.
c. neither finance leases not operating leases.

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