Asked by Michael McGlinchey on Jul 04, 2024
Verified
The CICA implemented new rules for lease accounting which formalized the distinction between operating and capital leases in:
A) 1912
B) 1946
C) 1967
D) 1979
E) 2001
Operating Lease
A lease agreement allowing a company to use an asset without ownership, with lease payments expensed as incurred.
Capital Leases
A lease agreement that grants the lessee almost all the risks and benefits of ownership of the asset leased.
- Identify key terminology and concepts in lease accounting, including sale and leaseback, leveraged leases, and the distinction between operating and financial leases.
Verified Answer
MH
matthew habermannJul 10, 2024
Final Answer :
D
Explanation :
The CICA (Canadian Institute of Chartered Accountants) implemented new rules for lease accounting which formalized the distinction between operating and capital leases in 1979.
Learning Objectives
- Identify key terminology and concepts in lease accounting, including sale and leaseback, leveraged leases, and the distinction between operating and financial leases.