New lease accounting rules

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• Criteria used to determine if a lease is classified

  How do they differ from the accounting procedures followed by the lessor for an operating lease? What are the four criteria used to determine if a lease is classified as a capital lease by both the lessee and lessor.

• Accounting: Leases, pensions, equity, multiple entities

  New Pension Accounting Rules: Defusing The Retirement Time Bomb. The CPA Journal, 76(11), 22-26. Cledon, T. (2000). Accounting For Leases - Part 2. ACCA.

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  If a contract satisfies any of the four criteria, it must be recognized as a capital lease in the financial statements. Hence, a lot more rules are applied under the US GAAP standard for lease accounting.

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  The solution first presents the four rules for classifying leases and then applies the rules to answer the question.

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  A new customer has approached the client with an opportunity that would require 120 trailers more than the trucking company currently owns.

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• Leasing Promulgations

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• E21-7 (Lessee-Lessor Entries; Sales-Type Lease) Woods Co Pal

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