Question
Why is only the expected shortfall under an RVG included?
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Answer
Because the liability reflects probable, not maximum, payment.
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Question
Why is finance-lease expense front-loaded?
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Answer
Interest is higher early, while amortization is straight-line.
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Question
How do cash flows differ between finance and operating leases?
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Answer
Operating is all operating; finance splits interest operating and principal financing.
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Question
When does a contract contain a lease under ASC 842?
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Answer
When it conveys control of an identified asset for a period in exchange for consideration.
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