NeedsSpace Case 9-4 NeedsSpace is leasing space to rent corporate offices from WeHaveIt. According to ASC 840‚ NeedsSpace has entered into an operating lease with a lease term of 10 years as defined by the Glossary in ASC 840 (paragraph 5(f) of Statement 13). The lease will be terminated at the end of the 10 year term and NeedsSpace will not be given the option to renew. The lease agreement specifies that the lessee may have to perform certain tasks at the cost of the lessee when the lease term
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NeedsLease entered into a ten-year operating lease for office space in accordance with ASC 840‚ Leases. It has neither renewal option nor the ability to negotiate for renewal per lease agreement. Within the leased premise‚ NeedsLease has placed into service various leasehold improvements that have economic useful lives of 12 years. In the lease agreement‚ there are certain provisions that may require the lessee to perform certain activities and to incur certain costs at the end of the lease
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classified as a lease and hence account for the transactions per guidance included in FASB Accounting Standards Codification‚ specifically ASC 840 – Leases. According to the Scope and Scope Exceptions section‚ accounting treatment for Digger’s particular arrangement with Farmer would not fall under the leases topic and thus would not be accounting for using its guidance. ASC 840-10-15-15 states: “This Topic [Leases] does not apply to lease agreements concerning the rights to explore for or to exploit natural
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HasSpace NeedsLease is renting a space for its corporate office from HasSpace by entering into a lease agreement. The agreed lease term is for 10 years and there is no option to renew nor is the ability to negotiate renewal of the term. According to ASC 840 (5F of statement 13)‚ the lease is classified as operating lease. The agreement includes two provisions that may require NeedsLease to perform certain activities at its cost. The first provision requires that the lessee‚ NeedsLease‚ may have to perform
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Cited: "IAS 17 - Leases." IAS Plus. Web. 25 Mar. 2015. <http://www.iasplus.com/en/standards/ias/ias17>. "ASC 840." Accounting Standards Codification. FASB. Web. 25 Mar. 2015. <https://asc.fasb.org/subtopic&trid=2208924>.
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There are 4 categories of financial assets under IFRS and 3 categories under ASC 825. Discuss the amount at which each category is initially recognized and how changes in the initially recognized amounts are reported in the balance sheet and in the statement of comprehensive income for each category. Include in your answer your
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determine what factors should be included in the minimum lease payments for the lease of a combustion turbine from Goliath Co. For each of the following three provisions‚ we determine what components should be included in “minimum lease payments” per ASC 840. Provision 1 Facts At the beginning of the lease‚ Big Bear pays $500‚000 to its legal counsel as well as $1 million in legal fees incurred by Goliath Co. The Company is required to pay the latter expense‚ but not the former. Alternatives 1. Include
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in the CPI was 4%. * * * Research Question * * Should the costs‚ or potential costs‚ associated with the increase in the CPI be included in “minimum lease payments” as defined in ASC 840? * * Relevant Literature * * According to ASC 840-10-25-4 and ASC 840-10-55-39 – if lease payments are dependent upon an existing index‚ such as the CPI‚ then the payments based on the rate at inception are to be included in minimum lease payments. If there are any index
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RESEARCH: Accounting Standard Codification (ASC) 1. FASB had four primary goals in developing the codification. List these four goals: 1. Simplify user access to all authoritative U.S. GAAP by putting them all in one place with codification 2. Assist FASB with the research and international convergence efforts required during the standard-setting process 3. Become the authoritative source of literature for the completed extensible business reporting language (XBRL) taxonomy 4. Clarify that
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According to ASC 840-10-25-6 (e)‚ minimum lease payments include‚ “Fees that are paid by the lessee to the owners of the special-purpose entity for structuring the lease transaction.” The legal fees incurred by Goliath‚ the lessee‚ are costs that were incurred structuring the lease‚ so this means that Big Bear should include the $1 million in its minimum lease payment. This cost is considered to be an initial direct cost‚ according to ASC 840-20-35-2‚ which states‚ “Deferred initial
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