easy · Financial Accounting liabilities-bonds-payable

Which of the following is NOT one of the five criteria used by a lessee to classify a finance lease under ASC 842?

  1. The lease contains a purchase option the lessee is reasonably certain to exercise.
  2. Transfer of ownership at the end of the term.
  3. The underlying asset is so specialized it has no alternative use to the lessor.
  4. The lease payments are variable based on future sales.

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