TRUE OR FALSE
For ASPE, one of the criteria for a capital lease is that the lease term must be at least 55% of the asset's economic or useful life.
A sales and leaseback transaction occurs when an asset is sold to the buyer and is immediately leased back from the buyer.
The lessor records depreciation.
If legal title of a leased asset, remains with the lessor and the leased equipment is returned to the lessor at the end of the lease term; the depreciation of the leased item will be the lease term.
For the lessor, the lease receivable is the total amount of lease payments that will be received.
For a direct-financing type lease, the lessor earns interest revenue only.
Executory costs include: insurance, maintenance, licenses and tax costs.
Under IFRS, the interest rate used for the present value calculation is the rate implicit in the lease if determinable, otherwise it is to be the lessee's incremental borrowing rate.