The identified asset in a lease must be physically distinct and the lessor's right to substitute the asset must not be substantive.

Question 38 options:

True

False

A lessee computes the present value of the minimum lease payments using the lessor's implicit interest rate. If that is unavailable, the lessee should use its incremental borrowing rate.

Question 42 options:

True

False

Which statement is not true?

Question 45 options:

If a lease is a finance lease because of a bargain purchase option, the leased asset should be depreciated over the life of the asset, not the life of the lease.

The lessee ignores unguaranteed residual value in the measurement of the lease obligation.

The lessor does not consider an unguaranteed residual value in measuring the lease receivable at the date of lease signing.

In direct financing leases, the net investment in the lease should be adjusted each year by material changes (increases or decreases) in estimated unguaranteed residual values.

A direct financing lease results in a manufacturers or dealers profit or loss and meets one or more of the capitalization criteria and both of the recognition criteria.

Question 46 options:

	True
	False