Ask Question
BusinessBusiness
30 January, 04:19

The amount to be recorded as the cost of an asset under a finance lease is equal to the present value of the lease payments or the fair value of the asset, whichever is lower. carrying value of the asset on the lessor's books. present value of the lease payments plus the present value of any unguaranteed residual value. present value of the lease payments.

+5
Answers (1)
  1. 30 January, 04:45
    0
    whichever is lower

    Explanation:

    Any assets cost is recorded at present value or fair value, whichever is lesser. This is analogous to stock being valued at cost price or sale price, whichever is less.

    The reason behind is Prudence or Conservatism principle of accounting. The principle states that anticipated losses should be accounted for, but the anticipated gains should not be accounted for.

    So, the asset value is recorded at the least value of the alternative valuations.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The amount to be recorded as the cost of an asset under a finance lease is equal to the present value of the lease payments or the fair ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
The law enforcement budget at the county level is approved by the
Answers (1)
Which of these assumptions can an entrepreneur safely make when planning a start-up? Check all that apply. Setting up a business in a large city will guarantee its success. Customers exist for every product.
Answers (1)
In the long run, if price is below the average variable cost, the perfect competitive firm should
Answers (1)
One test of evidence is "does the evidence come from unbiased sources?"
No Answers
A company's inventory records report the following in November of the current year: Beginning November 1 5 units @ $20 Purchase November 2 10 units @ $22 Purchase November 12 6 units @ $25 On November 8, it sold 12 units for $54 each.
Answers (1)
New Questions in Business
What way of calculating ROI makes it easiest to compare investments?
Answers (1)
Select the correct answer. Which assumption is a factor in Ricardo's Theory of International Trade? A. trade flow is restricted across borders B. trade laws are different in different nations C. labor is an irrelevant factor of production D.
Answers (1)
Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment strategy would be better. What would most strengthen argument for direct investment?
Answers (1)
A company has a defined benefit pension plan for its employees. On December 31, year one, the accumulated benefit obligation is $45,900, the projected benefit obligation is $68,100, and the fair value of the plan assets is $62,000.
Answers (2)
Which type of workplace culture emphasizes the development of new skills? a. achievement-based b. adaptive-based c. involvement-oriented d. consistency-oriented
Answers (2)
Home » Business » The amount to be recorded as the cost of an asset under a finance lease is equal to the present value of the lease payments or the fair value of the asset, whichever is lower. carrying value of the asset on the lessor's books.
Sign Up Forgot Password?