The Way IFRS GAAP Demand That Financial Leases Be Reported

Multiple Choice

The way IFRS GAAP demand that financial leases be reported encourages firms to:

A) Choose financial leases over outright acquisition in obtaining control over fixed resources to help increase the cash flow from operations.
B) Choose outright acquisition over financial leases in obtaining control over fixed resources to help reduce the cash outflow from investing.
C) Choose financial leases over outright acquisition in obtaining control over fixed resources to help hide the liability that reflects their commitment to owing the periodic lease payment for the duration of the contract.
D) Choose strategically between a financial lease and outright acquisition in order to obtain control over fixed resources since the rules neutralize the impact of the choice on the reported earnings.