Which of the Following Statements Is Incorrect

Which of the following statements is incorrect?

A) The capitalisation of a leased asset increases the value of reported non-current assets and reduces the return on assets ratio.
B) Recognition of the present value of future lease payments as a liability increases reported current and non-current liabilities.This favourably affects debt-equity ratios and liquidity- solvency ratios.
C) Depreciation and interest expenses on finance leases may exceed rental payments and result in lower profits being reported in the early years of the lease.
D) More onerous disclosure requirements are prescribed for finance leases than for operating leases.

Correct Answer:

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