Question
The FASB ASC indicates that because of special provisions normally present in leases involving terminal space and other airport facilities owned by a government unit
The FASB ASC indicates that because of special provisions normally present in leases involving terminal space and other airport facilities owned by a government unit or authority, the economic life of such facilities for purposes of classifying the lease is essentially indeterminate. Likewise, the concept of fair value is not applicable to such leases. Because such leases also do not provide for a transfer of ownership or a bargain purchase option, they are classified as operating leases. Leases of other facilities owned by a government unit or authority wherein the rights of the parties are essentially the same as in a lease of airport facilities shall also be classified as operating leases. Examples of such leases maybe those involving facilities at ports and bus terminals. The FASB specifies the conditions that must apply to meet this guidance. What are those conditions?
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