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Basic Question 2 of 15
Which of the following statements with regard to recording depreciation expense in an operating lease arrangement is true?
B. The lessor records depreciation expense using the lease term in the calculation.
C. The lessor records depreciation expense using the estimated useful life of the asset in the calculation.
A. The lessee records depreciation expense over the estimated useful life of the asset.
B. The lessor records depreciation expense using the lease term in the calculation.
C. The lessor records depreciation expense using the estimated useful life of the asset in the calculation.
User Contributed Comments 4
| User | Comment |
|---|---|
| thud | Difference between A and C? |
| nike | lessee versus lessor. |
| mordja | If the question involved a capital lease B would be correct. |
| Shaan23 | Mordja --- NO. With a capital lease the asset is derognized for the LESSOR. Removed from his BS. |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
explain the financial reporting of leases from the perspectives of lessors and lessees
CFA® 2025 Level I Curriculum, Volume 2, Module 8.