Asked by Harry Nayan on Jun 21, 2024
Verified
Constructive capitalization provides a preview of how the FASB/IASB exposure draft will affect lessee financial statements.
FASB/IASB Exposure Draft
A draft report proposed by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) for public comment on proposed changes to accounting standards.
Financial Statements
Reports that provide detailed information about a company's financial status, including balance sheets, income statements, and cash flow statements.
- Explore the consequences of a capitalized lease on the financial position and current ratio of a lessee in their financial documents.
Verified Answer
CR
Christopher Rogers
Jun 23, 2024
Final Answer :
True
Explanation :
Constructive capitalization is a method of analyzing the impact of lease accounting changes on a lessee's financial statements, and thus provides a preview of how the FASB/IASB exposure draft will affect lessee financial statements.
Learning Objectives
- Explore the consequences of a capitalized lease on the financial position and current ratio of a lessee in their financial documents.