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Lease classification
Criteria Analysis
substantially all of the fair value of the leased
asset.
Specialized nature The automobile is non-specialized and could be
used by another party without major
modifications.
Lessor Corp should classify the lease as an operating lease because none of the criteria in ASC 842-10-
25-2 or ASC 842-10-25-3 have been met.
See Example 4-10 for an illustration of the initial recognition and measurement of this type of lease.
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