San Diego State University Lease Response Discussion Hello this is the original prompt: QUESTIONS: 1. Which lease classification would management prefer?

San Diego State University Lease Response Discussion Hello this is the original prompt:

QUESTIONS:

1. Which lease classification would management prefer? Explain.

2. Would meeting SDI’s reporting objective be more or less difficult under IFRS? Explain.

3. Does SDI’s reporting objective pose an ethical dilemma? Why?

4. Who may be affected by SDI’s reporting objective? Why?

This is what I have to respond to from another student

If one of the five classification criteria is met, management would prefer operating lease because when leasing an asset, the rights and responsibilities are retained by the lessee and it being used temporarily. In an operating lease, the lessee is responsible to report lease expenses on a straight-line basis and the lessor reports revenue.
Referring to the book, it would be difficult for SDI to meet the reporting objective under IFRS. All leases are represented as finance leases under (one-model approach). The lessee must amortize the right-of-use asset on a straight-line (expense) while the lessor amortizes its lease receivable to record revenue.
I believe that SDI reporting will pose ethical dilemma because they’re trying to avoid income statements. Its best for accounting purposes to report all the requirement to renew the agreement between the lessor and the lessee because there could be a possibility for the classification to change.
Both are going to be affected by the SDI’s reporting because when facing issues or not provide information required, they are going to end up running into bigger issues. Both, the lessor and the lessee are not going to get accurate information to report expenses and revenue. However, on the other hand the lessee could be affected more because the risks and rewards are of the ownership are deemed to transfer to the lessee

Please answer (reply) student points the same format of 1-4. Please let me know if you have any question for the the other tutor that helped me did not do it properly and it resulted in a very low score. It is due tonight at 10:00 PM