In a leasehold improvement, the lessee debits the costs toMultiple choice question.LeaseholdsLease LiabilityLease AmortizationLeasehold Improvements

Statement I. A leasehold improvement that becomes the property of the lessor at the end of the lease term is a donation from the lessee.Statement II. A leasehold improvement that becomes the property of the lessor at the expiration of the lease term is included in gross taxable income of the lessor.Select one:a.Only A leasehold improvement that becomes the property of the lessor at the expiration of the lease term is included in gross taxable income of the lessor is correctb.Both statements are correctc.Only A leasehold improvement that becomes the property of the lessor at the end of the lease term is a donation from the lessee is correctd.Neither statement is correct

If the lessee is obliged to effect an improvement to the land or building of the lessor. Who includes the leasehold improvements effected by the lessee in their gross income ?Question 4Select one:a.lessorb.lesseec.neither one of the above

Which of the following statements is correct in accordance with AASB 16 Leases?Group of answer choicesVariable lease payments may be increased or decreased during the lease term because of changes in facts and circumstances occurring after the asset is made available to the lessee to use, other than the passage of time.Payment for executory costs reimbursed by the lessee after being paid by the lessor on behalf of the lessee are included in the calculation of lease payments.Right-of-use asset is depreciated from lease commencement to the longer of the lease term and its useful life, only where the economic benefits to be realised from using the asset are for a period of greater than ten years.Payments that are made by a lessee at commencement date are included in the initial amount recognised for the lease liability.

Which one of the followings is not considered in calculating the lease payments Reading required:            Learning objective 11.2.1 on pages 321-322Group of answer choicesExecutory costsPenalties for early terminationPeriodic rent paymentsExpected payable by the lessee under a residual value guaranteeExercise price of bargain purchase option

 A lessee enters into a five-year lease of a building which has a remaining useful life of ten years. Lease payments are $50,000 per annum, payable at the beginning of each year. The lessee incurs initial direct costs of $20,000 and receives lease incentives of $5,000. There is no transfer of the asset at the end of the lease and no purchase option. The interest rate implicit in the lease is not immediately determinable but the lessee's incremental borrowing rate is 5%. At the commencement date the lessee pays the initial $50,000, incurs the direct costs and receives the lease incentives. The lease liability is measured at the present value of the remaining four payments: