CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

A sufficient criterion for classification as a capital lease by a lessee is that the present value of the minimum lease payments is equal to 75% or more of the fair value of the leased asset. True or False?
Correct Answer: False

User Contributed Comments 3

User Comment
isida minimum lease payments must be equal to or greater than 90% of the value of the asset; lease period must be 75% or greater than the estimated life of asset
Sp1993 Do not mix up this classification criteria (75% of asset's economic life) with whether lease payments PV equals or exceeds 90% of the asset's fair market value
assiduous This is specifically under US GAAP rules
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