Sarah Donofrio Melissa Dragun Michael Geltrude Karan Kalaria Yumeng Zhang Overview Case Facts Capital Lease Classification Criteria 8401025 29 If at its inception a lease meets any of the four lease classification criteria in ID: 558388
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Slide1
Deal for a Dozer
Sarah DonofrioMelissa DragunMichael Geltrude Karan KalariaYumeng ZhangSlide2
OverviewSlide3
Case FactsSlide4
Capital Lease Classification Criteria
840-10-25-29 If at its inception a lease meets any of the four lease classification criteria in paragraph 840-10-25-1, the lease shall be classified by the lessee as a capital lease.Slide5
Present value of payments equals or exceeds 90% of fair value
Minimum Lease PaymentsSlide6
Fair Market Value
840-10-55-43 The determination of fair value should be made in light of market conditions prevailing at the time, which may indicate that the fair value of the property is less than the normal selling price Slide7
Capital Lease: Sales-type
Slide8
Journal EntriesSlide9
ConclusionSlide10
840-10-25-1
Lease Classification Criteria840-10-25-7 Minimum-Lease-Payments Criterion for a Lessor840-10-25-29 Lessee Application of Lease Classification Criteria840-10-25-41 Lessor Application of Lease Classification Criteria840-10-25-42 Lessor Application of Lease Classification Criteria
840-10-25-43
Lessor
Application of Lease Classification Criteria
840-10-55-42
Defining
Fair Value of the Leased Property
840-10-55-43
Defining
Fair Value of the Leased Property
840-10-55-44
Defining
Fair Value of the Leased Property
840-30-25 (Q&A 01) Sales Type Lease – Lessor Journal Entries Example
Accounting Standard Codification ReferencesSlide11
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