The Following Are Indicators in the Terms of a Lease

Multiple Choice

The following are indicators in the terms of a lease that cause it to be treated as a capital lease.The indicators are: (1) Losses clue to cancellation of the lease by the lessee are borne by the lessee.
(2) Gains and losses due to changes in the fair value of the leased asset are captured by the lessee.
These indicators are criteria that trigger lease capitalization under
$\begin{array}{lll}&\text {G A A P}&\text { IFRS }\\\text { I. } & \text { Yes } & \text { Yes } \\\text { II. } & \text { Yes } & \text { No } \\\text { III. } & \text { No } & \text { Yes } \\\text { IV. } & \text { No } & \text { No }\end{array}$

A) I
B) II
C) III
D) IV