- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 8. Topics in Long-Term Liabilities and Equity
- Subject 3. Accounting and Reporting by the Lessee
CFA Practice Question
In computing the present value of the minimum lease payments, the lessee should use the lower of its incremental borrowing rate and the implicit rate used by the lessor if known to the lessee. True or False?
Correct Answer: True
User Contributed Comments 2
| User | Comment |
|---|---|
| kalps | Lessess - PV of MLPs use the lower of incremental borrowing rate or tehe implicit rate used by the lessor |
| blumonster | this is to make the lease obligation as high as possible -in accordance with the conservative principle. |