Skip to content

CMA Intermediate · Financial Accounting · Lease Accounting

Under AS 19, which item is excluded from the minimum lease payments of a lessee?

Contingent rent is excluded from minimum lease payments under AS 19. Fixed rentals, the lessee-guaranteed residual value and the price of a purchase option reasonably certain to be exercised are all included in the lessee's minimum lease payments.

  1. AResidual value guaranteed by the lessee
  2. BFixed rentals payable over the lease term
  3. CContingent rentCorrect
  4. DPrice payable on a purchase option reasonably certain to be exercised

Explanation

Minimum lease payments exclude contingent rent, costs for services and taxes reimbursed to the lessor. Guaranteed residual value and a reasonably certain purchase option price are included. Fixed rentals are the core component.

Did you get it right without looking?

One question tells you little. A timed set on Lease Accounting shows your real accuracy, how long you take and where you lose marks.

Practise Lease AccountingFree diagnostic mock

More Lease Accounting questions