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Basic Question 6 of 16
Which of the following best describes the lessee's incremental borrowing rate?
B. The rate the lessee would likely have paid if it had purchased the asset with external financing
C. The average rate on ten-year AA-rated bonds
A. The lessor's rate of return implicit in the lease payments
B. The rate the lessee would likely have paid if it had purchased the asset with external financing
C. The average rate on ten-year AA-rated bonds
User Contributed Comments 2
| User | Comment |
|---|---|
| kalps | Lessess' incremental bowworing rate = the rate at which lessee would likely pay if it had purchased the asset with external borrowing |
| Freddie33 | Thanks for the simplification, Kalps |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
explain the financial reporting of leases from the perspectives of lessors and lessees
CFA® 2024 Level I Curriculum, Volume 2, Module 8.