CFA Practice Question

There are 1201 practice questions for this topic.

CFA Practice Question

The following type(s) of income is (are) recognized by a lessor for direct financing leases:

I. Interest revenue
II. Gain on sale
III. Rental revenue
Correct Answer: I

When a lease is a direct financing lease, there is no gain on the sale. The cost of the asset is equal to the fair value (or present value) of the asset. As a direct financing lease is a type of capital lease, there is no rent revenue, only interest revenue.

User Contributed Comments 1

User Comment
johntan1979 II sales type lease
III operating lease
You need to log in first to add your comment.