true or false

True/False # 1 2 3 4 mi 5 on 6 QUESTION - APPLIES TO NEW ACCOUNTING RULES ONLY When determining the classification for a lease contract under the New Lease Rules (TOPIC 842), US GAAP requires the application of a 4 part Criteria Analysis. The Lease Classification Test required by US GAAP applies to both the lessee and the Lessor's accounting classification. In a Lease Contract, the lessor retains legal title to the leased asset unless it is transferred. Under the New Lease Rules, ALL leases result in front end loading of expenses in the Income Statement and the use of ONE Lease expense. The underlying accounting concept for the new lease accounting rules is known as "on balance sheet" accounting Under the new Lease Accounting rules US GAAP provides the exception that short term leases, defined as those with a term of 1 year or less, do not need to be recorded "on balance sheet." In US GAAP it is strongly preferred that the lease accounting for the lessee's lease is derived from the use of the "lessor's implied rate" as a discount rate. There are two times during the term or life of the lease contract when the Lessee should normally expect the Right of Use asset account to equal the Lease Obligation liability account: at the start of the lease and at the end of the lease term. (This may be reduced to one event, the end of the lease, if certain miscellaneous items must be recorded as an adjustment to the Right of Use Asset.) US GAAP provides for two lease accounting models under the New Lease Rules, while IFRS only provides one model. Sir David Tweedle of the nation of Scotland, wants to fly a plane before he dies that is on someone's balance sheet. Do the new lease rules assure that his wish is fulfilled? 7 8 9 10