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Explain difference in operating lease and leases classified

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Reference no: EM132323925

Question

Under ASC 842, a lessee initially measures the right-of-use (ROU) asset and lease liability at the present value of the lease payments made over the lease term. The subsequent measurement of the lease liability and ROU asset, and therefore the income statement effect differs between leases classified as an operating lease and leases classified as finance leases. Explain what those differences are.

Reference no: EM132323925

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