RUNNING HEADER - INDIVIDUAL ASSIGNMENT- WEEK FIVE

Individual Assignment

ACC 400 - Accounting for Decision Making

Case 13-4 Application of SFAC No. 13 and Case 13-5 Lease Classifications

Individual Assignment - Week Five

Case 13-4 Application of SFAC Number 13

A -The Theoretical Basis for the Accounting Standard that requires

certain long-term leases to be capitalized by the lessee

Certain condition for specific long-term leases that is the theoretical basis for

accounting standards. The condition that must be met for capital leases are as follows.

1. The contract for the lease has to be put in possession of the lessee at the end

of the lease time frame if not before.

1. The lease contract includes an option to buy the assets at a lower price.

2. The time frame...