The FASB defines financial lease as leases that meet the following: The lease agreement transfers ownership to...

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The FASB defines financial lease as leases that meet thefollowing:
The lease agreement transfers ownership to the lessee before thelease expires, or the lessee can purchase the asset for a bargainprice when the lease expires.
The lease agreement transfers ownership to the lessee before thelease expires or the lessee can purchase the asset for a bargainprice when the lease expires, or the lease lasts for at least 75percent of the asset's estimated economic life.
The lease agreement transfers ownership to the lessee before thelease expires, or the lessee can purchase the asset for a bargainprice when the lease expires, or the lease lasts for at least 75percent of the asset's estimated economic life, or the presentvalue of the lease payments is at least 90 percent of the asset'svalue.
The lessee can purchase the asset for a bargain price when thelease expires, or the lease lasts for at least 75 percent of theasset's estimated economic life, or the present value of the leasepayments is at least 90 percent of the asset's value.

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To be classified as an operating lease or capitalfinance lease Companies must test for four criteria bright line tests that determine whether rental contracts must be booked as operating or capital leases There is an See Answer

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The FASB defines financial lease as leases that meet thefollowing:The lease agreement transfers ownership to the lessee before thelease expires, or the lessee can purchase the asset for a bargainprice when the lease expires.The lease agreement transfers ownership to the lessee before thelease expires or the lessee can purchase the asset for a bargainprice when the lease expires, or the lease lasts for at least 75percent of the asset's estimated economic life.The lease agreement transfers ownership to the lessee before thelease expires, or the lessee can purchase the asset for a bargainprice when the lease expires, or the lease lasts for at least 75percent of the asset's estimated economic life, or the presentvalue of the lease payments is at least 90 percent of the asset'svalue.The lessee can purchase the asset for a bargain price when thelease expires, or the lease lasts for at least 75 percent of theasset's estimated economic life, or the present value of the leasepayments is at least 90 percent of the asset's value.