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CMA Part 1
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1. External financial reporting decisions
2. Planning, budgeting, and forecasting
3. Performance management
4. Cost management
5. Internal control
6. Technology and analytics
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1.2.9.1 Learning outcomes
Achievable CMA Part 1
1. External financial reporting decisions
1.2. Financial transactions
1.2.9. Leases
Our CMA Part 1 course is currently in development and is a work-in-progress.

Learning outcomes

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The learning outcome statements related to leases are as follows:

  1. Distinguish between operating and finance leases
  2. Recognize the correct financial statement presentation of operating and finance leases

Operating vs. Finance Leases

  • Operating lease: rental agreement, no asset/liability recorded (lessee)
  • Finance lease: transfers substantially all risks/rewards of ownership
  • Finance lease: asset and liability recognized on balance sheet

Financial Statement Presentation

  • Operating lease:
    • Expense recognized as lease/rent expense on income statement
    • No asset or liability on balance sheet (lessee)
  • Finance lease:
    • Asset (right-of-use) and liability recorded on balance sheet
    • Interest and depreciation expense recognized separately on income statement
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Learning outcomes

The learning outcome statements related to leases are as follows:

  1. Distinguish between operating and finance leases
  2. Recognize the correct financial statement presentation of operating and finance leases
Key points

Operating vs. Finance Leases

  • Operating lease: rental agreement, no asset/liability recorded (lessee)
  • Finance lease: transfers substantially all risks/rewards of ownership
  • Finance lease: asset and liability recognized on balance sheet

Financial Statement Presentation

  • Operating lease:
    • Expense recognized as lease/rent expense on income statement
    • No asset or liability on balance sheet (lessee)
  • Finance lease:
    • Asset (right-of-use) and liability recorded on balance sheet
    • Interest and depreciation expense recognized separately on income statement

More from Leases

  • Definitions
  • Types of leases
  • Finance lease
  • Operating lease