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Dicussion pg 942

Dicussion pg 942 - asset at the end of the lease term at a...

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What is a Bargain Purchase Option? **Bargain purchase option is a lease provision that allows for the purchase of a leased asset in the future by the lessee at a price so low that the lessee is almost certain to exercise the option. (Book Definition) **Stipulation in a lease agreement that gives a lessee the right to purchase the leased
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Unformatted text preview: asset at the end of the lease term, at a cost substantially lower than its estimated fair market value at that time. According to the Financial Accounting Standards Board, if a non-cancelable lease has a bargain-purchase option, it must be classified as a capital lease. (More Understandable Definition)...
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