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Access the FASB’s Codification Research System at the FASB website (WWW.fasb.org). Determine the specific citation for...

Access the FASB’s Codification Research System at the FASB website (WWW.fasb.org). Determine the specific citation for accounting for each of the following items: Required: 1. Definition of initial direct costs. 3. The disclosures required in the notes to the financial statements for a lessor. Please include paragraphs in codification

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1.) Initial Direct Costs:

“Only those costs incurred by the lessor that are (a) costs to originate a lease incurred in transactions with independent third parties that (i) result directly from and are essential to acquire that lease and (ii) would not have been incurred had that leasing transaction not occurred and (b) certain costs directly related to specified activities performed by the lessor for that lease. Those activities are: evaluating the prospective lessee’s financial condition; evaluating and recording guarantees, collateral, and other security arrangements; negotiating lease terms; preparing and processing lease documents; and closing the transaction. The costs directly related to those activities shall include only that portion of the employees’ total compensation and payroll-related fringe benefits directly related to time spent performing those activities for that lease and other costs related to those activities that would not have been incurred but for that lease. Initial direct costs shall not include costs related to activities performed by the lessor for advertising, soliciting potential lessees, servicing existing leases, and other ancillary activities related to establishing and monitoring credit policies, supervision, and administration. Initial direct costs shall not include administrative costs, rent, depreciation, any other occupancy and equipment costs and employees’ compensation and fringe benefits related to activities described in the previous sentence, unsuccessful origination efforts, and idle time”

Data as per Paragraph 5(m) of FASB Statement No. 13 taken from www.fasb.org

3. Disclosures required in the notes to the financial statements for a lessor:

This Appendix illustrates one way of meeting the disclosure requirements of this Statement, except for those relating to leveraged leases which are illustrated in Appendix E. The illustrations do not encompass all types of leasing arrangements for which disclosures are required. For convenience, the illustrations have been constructed as if the Statement had been in effect in prior years.

Data as per Paragraph 122 & 103 of FASB Statement No. 13 taken from www.fasb.org


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