Which of the following statements about the treatment of leases on the lessor’s financial statements is least accurate?
A. If the present value of the payments on a finance lease is greater than the carrying value of the asset, the lease is a sales-type lease on the books of the lessor.
B. To be a finance lease for the lessor, collectibility must be reasonably certain and the lessor must have substantially completed performance.
C. Current portion of the lease liability is disclosed in current liabilities, while the non-current portion is disclosed in non-current liabilities.
D. In a direct financing lease, the lessor recognizes gross profit at the lease inception, while in a sales-type lease it does not.
What is your question about this question?
I want to know why the answer is D