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Basic Question 3 of 3
Management's intentional structuring of a lease transaction as an off-balance-sheet item (operating lease) illustrates how GAAP requirements may result in the quality of financial reporting being distorted. True or False?
User Contributed Comments 4
| User | Comment |
|---|---|
| kalps | FALSE, as GAAP requires disclosure of commitments under CL for the future five years |
| db28luke | GAAP does require disclosure, but it is usually buried near the end of the footnotes. Most people don't get that far. |
| poomie83 | Umm the question is refering to op lease - therefore true |
| ascruggs92 | kapls: CL's are not off balance sheet |
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Learning Outcome Statements
explain the financial reporting of leases from the perspectives of lessors and lessees
CFA® 2024 Level I Curriculum, Volume 2, Module 8.