Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 1 of 8
Norquist Company is planning to lease a machine from Smith Company for 3 years. The machine has an estimated life of 5 years. The lease will not transfer the machine's ownership to Norquist at the end of the lease, nor does the lease contain a bargain purchase option. The present value of the minimum lease payments is less than 90% of the machine's fair value. Norquist should account for the lease as a capital lease. True or False?
User Contributed Comments 1
| User | Comment |
|---|---|
| kalps | Criteria: 1. PV of MLPs >= 90% of fair value of asset 2. Bargain option 3. 75% ownership of the assets life 3. Ownership of lessee after term of lease |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
explain the financial reporting of leases from the perspectives of lessors and lessees
CFA® 2025 Level I Curriculum, Volume 2, Module 8.