Which of the following are the correct descriptions of the lease liability in the 2024 Japan Architect Examination
Which of the following are the correct descriptions of the lease liability in the 2024 Japan Architect Examination? ( )
A. It shall be initially measured at the present value of future rent payable
B. Interest shall be accrued at the effective interest rate method in subsequent periods
C. Its book value will decrease with the payment of rent
D. No lease liability needs to be recognized for short-term leases
Answer: ABCD
Explanation: The initial measurement amount of the lease liability is the present value of future rent payable; interest shall be accrued at the effective interest rate method in subsequent periods (included in financial expenses); when rent is paid, the book value of the lease liability is reduced; if the lessee chooses the simplified treatment for short-term leases, no lease liability needs to be recognized.
