Which of the following is not a criterion for a lease to be classified as a finance lease under ASC 842
Which of the following is not a criterion for a lease to be classified as a finance lease under ASC 842?
A. The lease transfers ownership
B. The lease has a bargain purchase option
C. The lease term is 75% of the asset's useful life
D. The present value of lease payments is 95% of the asset's fair value
Answer: D
Explanation: ASC 842 requires PV of payments ≥ 90% of FV (not 95%). 95% is too high.
