Question: 1. SFAS No. 13 in effect regards a lease period of 75 percent or more as a relevant circumstance in distinguishing between capital and operating leases. What economic factors (cash flow differentials) lie behind this policy choice?
2. An argument against additional disclosure is that financial analysts aggressiyely seek this information, which is then sold to their customers, resulting in an adequate market solution to the problem of providing timely and relevant information on securities. Do you agree?