Sorry, I should revise my statement just sent in the way as follows:
What's wrong with option I ?
"IFRS does not allow classification of a lease as an operating lease regardless the substance of the transaction." just means as what the suggested solution said , "IFRSs allows classification of a lease as an operating lease or finance (capital lease) based on the substance of the transaction", though it was stated in different wordings. -------------------------------------------
Kam Sing LEUNG CFP, CPA, FCCA
Controller
Total Solution Consultancy (Hangzhou) Limited
Hangzhou
China
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Original Message:
Sent: 06-16-2013 08:04 AM
From: Kam Sing LEUNG
Subject: plz need explanation
What's wrong with option 1?
"IFRSs allows classification of a lease as an operating lease or finance (capital lease) based on the substance of the transaction" just means as what the suggested solution said "IFRS does not allow classification of a lease as an operating lease regardless the substance of the transaction." , though it was stated in different wordings.
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Kam Sing LEUNG CFP, CPA, FCCA
Controller
Total Solution Consultancy (Hangzhou) Limited
Hangzhou
China
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Original Message:
Sent: 06-16-2013 07:36 AM
From: Hayam Mohamed Aly Helwa
Subject: plz need explanation
Dear All
plz can any one explain this Q i cannt understand how 1 is correct answer while answer feed back say IFRSs allows classification of a lease as an operating lease or finance (capital lease) based on the substance of the transaction. IFRSs does not allow a lease to be classified as a leveraged lease.
Question ID (2A4-LS18)
Consider the statements below regarding accounting classifications for leases under U.S. GAAP and IFRSs. Which statements are correct?
I. IFRS does not allow classification of a lease as an operating lease regardless the substance of the transaction.
II. IFRSs does not allow classification of a lease as a finance (capital) lease.
III. U.S. GAAP does not allow classification of a lease as a leveraged lease.
IV. U.S. GAAP allows classification of a lease by the lessor as either a; sales-type, direct financing, or operating lease based on the substance of the transaction.
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[Hayam] [Helwa]
[Senior Accountant]
[DKT International]
[Cairo]
[Egypt]
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