Asked by
James Shibest
on Nov 07, 2024
Verified
Based upon the standards issued by CICA, a financial lease must be capitalized if the lessee receives title to the asset by the end of the lease term.
CICA
Canadian Institute of Chartered Accountants, responsible for setting accounting and auditing standards in Canada.
Financial Lease
A type of lease in which the lessee is effectively considered to own the asset during the lease term and bears the risk of obsolescence.
- Outline the prerequisites for a lease's classification as a capital lease according to accounting protocols.
Verified Answer
SW
Learning Objectives
- Outline the prerequisites for a lease's classification as a capital lease according to accounting protocols.