Question $4$ of $34$

A company signs a lease that results in a $$200$ Operating Lease Asset and a $$200$ Operating Lease Liability appearing on its

Balance Sheet. Its fixed annual cash rental payment is $$25$ per year, and it uses a Discount Rate of $6\%$ for this lease, which has a

term of $10$ years.

After one $(1)$ year passes, how will this company's Total Assets DIFFER under the U$.$S$.$ GAAP vs$.$ IFRS treatments of Operating

Leases? Assume a $25\%$ tax rate.

They'll be the same because under both accounting systems, the Operating Lease Asset for a single lease decreases by the same

amount each year.

Under IFRS, Total Assets will be lower by $$5.$

Under IFRS, Total Assets will be lower by $$3.$

Under IFRS, Total Assets will be lower by $$1.$