Question

Which of the following is not required in order for a contract to contain a lease?! Multiple Choice O

-The asset must be explicitly identified in the contract.
-The customer con derive substantially all of the potential economic benefits from using the asset
-The customer can direct the use of the asset throughout the contract term. o oo
-The provider cannot have the right to substitute alternative assets during the period of use and could benefit economically from s

Answer 1

In order for a contract to contain a lease, the asset must be explicitly identified (option 1), the customer must derive economic benefits and direct the use of the asset (option 2). The provider's right to substitute assets is not required.

Step-by-step explanation:

In order for a contract to contain a lease, several requirements need to be met. The asset must be explicitly identified in the contract, so the specific property being leased is clearly stated. The customer must be able to derive substantially all of the potential economic benefits from using the asset, meaning they will be able to benefit financially from its use. Additionally, the customer must be able to direct the use of the asset throughout the contract term, giving them control over how the asset is used.

Out of the options given, the one that is not required for a contract to contain a lease is: The provider cannot have the right to substitute alternative assets during the period of use and could benefit economically from such substitution.