Describe some of the history of this issue-did board hold

Reference no: EM132713008

Question - Variable Rents-A Liability? Assume a company pays $10,000 per month plus 2% of sales ("a variable rent charge") to occupy a retail space in a mall. The lease agreement has a 3-year noncancelable term. Based on prior history in that location, the company estimates that its variable rent charge will amount to approximately $1,000 per month.

a. Using the Conceptual Framework, evaluate whether this variable rent change meets the definition of a liability.

b. Next, locate discussion in the Basis for Conclusions of ASU 2016-02 (Leases) and describe how the FASB considered this issue of whether variable rents should be included in the lease liability recognized by companies. Describe some of the history of this issue-did the Board always hold the view that variable rents should/should not be included in companies' lease obligations?

Reference no: EM132713008

Questions Cloud

What is the most likely point in the equity cycle : You stop buying common stocks and invest in short-term interest-bearing paper. What is the most likely point in the equity cycle at that point in time?

Create huge competitive advantages : Clond computing can create huge competitive advantages if applications and services are correctly architected to satisfy the business requirements.

Calculate the value of the motor vehicle fringe benefit : Garry decides to visit his friend in Rotorua. He drives there using his work vehicle which cost $30,000. Calculate the value of motor vehicle fringe benefit

How much will reed need to have accumulated on the day : Reed, age 45, How much will Reed need to have accumulated on the day that he retires to adequately provide for his retirement lifestyle?

Describe some of the history of this issue-did board hold : Describe some of the history of this issue-did the Board always hold the view that variable rents should/should not be included in companies' lease obligations

Discuss departures from the marketing plan : Create the final report to the board which will be a written summary of performance. The report to the executive board should include the components

Is the use of these services ethical : There are research services available online that can be used by students preparing term papers. Is the use of these services ethical?

Calculate the npv for kathy orthopedics : Calculate the NPV.Kathy Orthopedics Group is evaluating a new machine. The machine requires an initial investment of $24,000 and will generate

How personal financial software assist financial decision : How could personal financial software assist you in your personal financial decisions? What is accounting and how does it help you manage your personal finances

User Account

All Pages