1. Should a loss on a sublease not involving the disposal of a segment be recognized and how is it determined? Response 2. The general principle of recognizing losses on transactions and the applicability of that general principle to contracts that are expected to result in a loss are well established. Accordingly, if costs expected to be incurred under an operating sublease (that is, executory costs and either amortization of the leased asset or rental payments on an operating lease, whichever is applicable) exceed anticipated revenue on the operating sublease, a loss should be recognized by the sublessor. Similarly, a loss should be recognized on a direct financing subleas
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