According to current GAAP, leased property could be reported as an asset on the balance sheet of the lessee and the lessor as follows: $\begin{array}{lll}&\text { Lessee}&\text { Lessor }\\ \text { I. } & \text { included } & \text { included } \\\text { II. } & \text { included } & \text { not included }\\\text { III. } & \text {not included } & \text { not included }\end{array}$

A) I
B) II
C) III
D) all of the above

Question

According to current GAAP, leased property could be reported as an asset on the balance sheet of the lessee and the lessor as follows:

\begin{array}{lll}&\text { Lessee}&\text { Lessor }\\ \text { I. } & \text { included } & \text { included } \\\text { II. } & \text { included } & \text { not included }\\\text { III. } & \text {not included } & \text { not included }\end{array}

A) I
B) II
C) III
D) all of the above

Dominic Smith · Accepted Answer

Final Answer : D, Explanation :  Under current GAAP, leased property can be reported as an asset on the balance sheet of both the lessee and the lessor, depending on the lease classification. For a finance lease, the lessee recognizes the leased asset on their balance sheet, while the lessor continues to do so as well. In operating leases, the lessee also recognizes a right-of-use asset, and the lessor includes the leased asset on their balance sheet. Therefore, all options are possible under different scenarios.

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