Which items are typically included in lessee disclosures for a capital lease?

• A. Gross asset amount, related accumulated depreciation, obligation current and noncurrent, and minimum lease payments for the next five years
• B. Only net asset value
• C. All operating lease disclosures unrelated
• D. No disclosures

Answer: (A)

Capital leases require the lessee to report a leased asset and a lease liability on the balance sheet, and the disclosures mirror that structure. You show the asset’s gross amount and its related accumulated depreciation so users can see the asset’s carrying value and how depreciation affects earnings. For the liability, you separate the current portion (what’s due within one year) from the noncurrent portion (what’s due after that). You also present the minimum lease payments for the next five years to illustrate the contractual cash outflows tied to the lease. This combination provides a complete picture of what the lessee controls under the lease, how the asset is depreciated, and the timing of lease payments. The other options don’t fit because they omit these required components, such as not detailing the asset and depreciation or claiming no disclosures are needed.