Reference no: EM133360051

Part 1:

Instructions:

Determine the specific seven- or eight-digit Codification citation for accounting for each of the following items: (Value = 5 points each = 20 Total for Part 1)

Definition of initial direct cost.
When a modification to a contract is reported as a separate contract (that is, separate from the original contract).
The disclosures required in the notes to the financial statements for a lessor.
The classification criteria for when a lessee classifies a lease as a finance and a lessor classifies a lease as a sales-type lease.

Part 2:

Instructions:

Determine the specific eight-digit Codification citation for accounting for each of the following items. (Total value 30 points for Part 2)

The lease term is the noncancelable period for which a lessee has the right to use an underlying asset, modified by any renewal or termination options that are "reasonably certain" to be exercised, or not exercised. Options whose exercise is under the control of the lessor are automatically included. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles.

Determine the specific eight-digit Codification citation that describes the guidelines for determining when the lessee should reassess the term of the lease.
List the disclosure requirements.