Misconception · MIS:operating-lessor-recognizes-a-net-investment

Mistaken idea “An operating lessor recognizes a net investment”

Mistaken reasoning: This mistake derecognizes the underlying asset in the residual lessor model.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

An operating lessor retains the underlying asset and recognizes lease income. Net investment belongs to sales-type and direct-financing routes.

Where to watch

When this mistake may appear

  • The lessor receives fixed multi-year payments.
Check your work

Your work may contain this mistake if:

  • Replace PP&E with a lease receivable or net-investment asset.