Leases Flashcards
1
Q
Leases - What are the 4 classifications where an operating lease must be capitalized ?
A
1) TT: Title Transfer at the end of the lease term.
2) BPO: a Bargain Purchase Option by the end of the lease term.
3) 75: the lease term is less than or equal to 75% of the remaining life of the asset at time of inception.
4) 90: Present Value of the Minimum Lease Payments of the lease is more than or equal to 90% of the asset’s FMV at time of inception.
