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Commerce · Q562

Business Finance

Graduate and Post Graduate · Commerce · question 562

Q562

How should the Minimum Lease Payment (MLP) of a land and building lease get apportioned?

A.
Treat entirely as building
B.
Treat entirely as land
C.
Apportion MLP between land and buildings based on fair value of leasehold interests
Answer
D.
Apportion MLP between land and buildings based on management's judgement

Answer: Option C

Solution

Answer: Option C
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