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Homework answers / question archive / Per the Accounting Standards Update (ASU) 2018-02, all leases lasting more than a year must be included in the balance sheet by reporting the a
Per the Accounting Standards Update (ASU) 2018-02, all leases lasting more than a year must be included in the balance sheet by reporting the a. undiscounted sum of future lease payments as an asset and as an offsetting liability. b. residual value as a fixed asset. c. present value of future lease payments as an asset and also showing this same amount as an offsetting liability. d. residual value as a liability. e. undiscounted sum of future lease payments, less the residual value, as an asset and as an offsetting liability.
ANSWER -
The correct answer is
present value of future lease payments as an asset and also showing this same amount as an offsetting liability.
FASB (Financial standard accounting standard board requires that leases must be included in the balance sheet by discounting to their present value and recording it on the balance sheet.
We use the discounted value not the undiscounted value, so other option is not correct.
