Search results “Lease payments definition”
1  Lease - Lessee - Lessor - MEANING
A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. A lease guarantees the lessee (the renter) use of an asset and guarantees the lessor (the property owner) regular payments from the lessee for a specified number of months or years. The lessor = is the owner of the asset The person who rents land or property from a lessor. The lessee is also known as the "tenant"
Views: 23481 financeschoolin
Lease Accounting Overview (the new lease rule)
This video provides an overview of lease accounting based on the new accounting rule per U.S. GAAP (ASU 2016-02). Under the new rule, all leases longer than one year must be capitalized. This means the lessee recognizes the property being leased as an asset, along with a corresponding liability for the lease payments. This is important, as many firms avoided recognizing billions of dollars in liabilities under the old lease accounting rules by structuring their leases to avoid capitalization. Even though all leases longer than one year must now be capitalized, both lessors and lessees must perform five different tests to determine what type of lease they have (lessees classify a lease as a finance lease or an operating lease, whereas lessors classify a lease as a sales-type lease or an operating lease). Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 16944 Edspira
How to Account for a Finance Lease (Lessee's Perspective)
This video shows how the lessee would account for a lease classified as a finance lease under the new lease accounting rule. The lessee would initially recognize a right-of-use asset and a liability for the lease payments. The right-of-use asset is amortized over time, while the lease liability is reduced when lease payments are made and increased as interest effectively accrues on the lease liability. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 18069 Edspira
Leasing | Meaning | Purpose | Advantage | Disadvantage | Diff. btw. Rent & lease
WHAT IS A LEASE OR LEASING? A famous quote by Donald B. Grant says, “Why own a cow when the milk is so cheap? All you really need is milk and not the cow.” The concept of Lease is influenced by this quote. We can compare ‘milk’ with the ‘rights to use an asset’ and ‘cow’ with the ‘asset’ itself. Ultimately, a person who wants to manufacture a product using machinery can get to use that machinery under a leasing arrangement without owning it. Meaning A lease can be defined as an arrangement between the lessor (owner of the asset) and the lessee (user of the asset) whereby the lessor purchases an asset for the lessee and allows him to use it in exchange for periodical payments called lease rentals or minimum lease payments (MLP). Leasing is beneficial to both the parties for availing tax benefits or doing tax planning. At the conclusion of the lease period, the asset goes back to the lessor (the owner) in an absence of any other provision in the contract regarding compulsory buying of the asset by the lessee (the user). There are four different things possible post-termination of the lease agreement. 1.) The lease is renewed by the lessee perpetually or for a definite period of time. 2.) The asset goes back to the lessor. 3.) The asset comes back to the lessor and he sells it off to a third party. 4.) Lessor sells to the lessee Advantage A.) Advantages of Leasing to the Lessor 1.) Higher Profits The lessor acting can make high profits from leasing of the asset. The profits will take care of his cost of capital as well as the risk involved. 2.) Tax Benefits The lessor being the owner of the asset can claim various tax benefits such as depreciation, investment allowance, etc. In fact, leasing has been successfully employed by the leasing companies to reduce their tax liabilities. Disadvantage 1.) High Risk of Obsolescence The lessor has to bear the risk of obsolescence especially in the present era of rapid technology developments. 2.) Competitive Market As a number of leasing companies have emerged in recent years in India, the lessor has to face a tough competition from Indian as well as foreign companies. Difference between rent and lease Rental agreement provides for a tenancy of a short period (often 30 days) that is automatically renewed at the end of the period unless the tenant or landlord ends it by giving written notice. For these month-to-month rentals, the landlord can change the terms of the agreement with proper written notice. A written lease, on the other hand, gives a renter the right to occupy a rental unit for a set term -- most often for six months or a year but sometimes longer -- as long as the tenant pays the rent and complies with other lease provisions. The landlord cannot raise the rent or change other terms of the tenancy during the lease, unless the tenant agrees.
Views: 146 Smart Education
Lease Definition - What is a Lease?
Lease definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Lease can be defined as: Contract specifying the rental of property. When thinking about a lease we need to understand the meaning of similar sounding terms, terms like lease, leasehold, lessee, and lessor. A lease it a transaction between at least two parties were the owner, or lessor, leases the use of the property to a lessee or renter. Payment is usually make form the lessee to the lessor in the form of rent. Why Learn Accounting - Financial Accounting / Managerial Accounting https://youtu.be/uaWDB1YdA1k?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Double Entry Accounting System Explained - Accounting Equation https://youtu.be/66e9QbrkE4g?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Cash vs Accrual - Cash Method / Accrual method differenc https://youtu.be/i2O0cexCrqc?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Revenue Recognition Principle https://youtu.be/M_pauBGz5Jc?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI Double Entry Accounting System Explained - Balance Sheet https://youtu.be/kOItl8E3fNA?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Income Statement Introduction https://youtu.be/1k11H8icQxc?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Accounting Objectives - Relevance Reliability Comparability https://youtu.be/mO8tPzFmN8o?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Transaction Rules - Accounting Equation https://youtu.be/0vy6W_WTO2I?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Transaction Throught Process / Steps - Accounting Equation https://youtu.be/SlTo3EXDuqU?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Owner Deposits Cash Transaction Accounting Equation https://youtu.be/lPZoImc88eU?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 101 Work Completed for Cash Transaction Accounting Equation https://youtu.be/ll5xIHVdrVs?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 100.110 Pay Employee with Cash Transaction Accounting Equati https://youtu.be/bSa3NuVpkwc?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 200 Debits & Credits Normal Balance - Double Entry Accounting Sy https://youtu.be/alSWKuWPlxU?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI 200 Debits & Credits - One Rule to Rule Them All https://youtu.be/RL3BFjL1eyE?list=PL60SIT917rv52SlrB3FFn2WMyZEkj6uBI
Wat is leasing?
Views: 6141 VNAlease
Difference between Finance Lease and Operating Lease
Install our android app CARAJACLASSES to view lectures direct in your mobile - https://bit.ly/2S1oPM6 Join my Whatsapp Broadcast / Group to receive daily lectures on similar topics through this Whatsapp direct link https://wa.me/917736022001 by simply messaging YOUTUBE LECTURES Did you liked this video lecture? Then please check out the complete course related to this lecture, FINANCIAL MANAGEMENT – A COMPLETE STUDYwith 500+ Lectures, 71+ hours content available at discounted price(10% off) with life time validity and certificate of completion. Enrollment Link For Students Outside India: https://bit.ly/2PmYtDf Enrollment Link For Students From India: https://www.instamojo.com/caraja/financial-management-a-complete-study-online/?discount=inyfmacs2 Our website link : https://www.carajaclasses.com Indepth Analysis through 300+ lectures and case studies for CA / CFA / CPA / CMA / MBA Finance Exams and Professionals ------------------------------------------------------------------------------------------------------------------------ Welcome to one of the comprehensive ever course on Financial Management – relevant for any one aspiring to understand Financial Management and useful for students pursing courses like CA / CMA / CS / CFA / CPA, etc. A Course with close to 300 lectures explaining each and every concept in Financial Management followed by Solved Case Studies (Video), Conversational Style Articles explaining the concepts, Hand outs for download, Quizzes and what not?? ------------------------------------------------------------------------------------------------------------------------ This course is about Financial Management. By taking up this course, you will have opportunity to learn the all facets of Financial Management. Knowledge on Financial Management is important for every Entrepreneur and Finance Managers. Ignorance in Financial Management can be disastrous because it would invite serious trouble for the very functioning of the organisation. This is a comprehensive course, covering each and every topic in detail. In this course,you will learn the Financial Management basic concepts, theories, and techniques which deals with conceptual frame work. Following topics will be covered in this course a) Introduction to Financial Management (covering role of CFO, difference between Financial Management, Accounting and other disciplines) b) Time Value of Money c) Financial Analysis through Ratios (covering ratios for performance evaluation and financial health, application of ratio analysis in decision making). d) Financial Analysis through Cash Flow Statement e) Financial Analysis through Fund Flow Statement f) Cost of Capital of Business (Weighted Average Cost of Capital and Marginal Cost of Capital) g) Capital Structuring Decisions (Capital Structuring Patterns, Designing optimum capital structure, Capital Structure Theories). h) Leverage Analysis (Operating Leverage, Financial Leverage and Combined Leverage) I) Various Sources of Finance j) Capital Budgeting Decisions (Payback, ARR, MPV, IRR, MIRR) k) Working Capital Management (Working Capital Cycle, Cash Cost, Budgetary Control, Inventory Management, Receivables Management, Payables Management, Treasury Management) This course is structured in self learning style. It will have good number of video lectures covering all the above topics discussed. Simple English used for presentation. Take this course to understand Financial Management comprehensively. Mandatory Disclosure regarding course contents: This course is basically a bundle of following courses: a) Time Value of Money b) Cash Flow Statement Analysis c) Fund Flow Statement Analysis d) Finance Management Ratio Analysis e) Learn how to find cost of funds f) Learn Capital Structuring g) Learn NPV and IRR Techniques h) Working Capital Management. If you are purchasing this course, make sure you don't purchase the above courses. Also note, this course is also bundled in comprehensive course named Accounting, Finance and Banking - A Comprehensive Study. So if you are purchasing above course, make sure you don't purchase this course. • Category: Business What's in the Course? 1. Over 346 lectures and 48 hours of content! 2. Understand Basics of Financial Management 3. Understand Importance of Time Value of Money 4. Understand Financial Ratio Analysis 5. Understand Cash Flow Analysis 6. Understand Fund Flow Analysis 7. Understand Cost of Capital 8. Understand Capital Structuring 9. Understand Capital Budgeting Process 10. Understand Working Capital Management 11. Understand Various sources of Finance Course Requirements: 1. Students can approach with fresh mind Who Should Attend? 1. Any one who wants to learn Financial Management comprehensively 2. MBA (Finance) students 3. CA / CMA / CS / CFA / CPA / CIMA
What is LEVERAGED LEASE? What does LEVERAGED LEASE mean? LEVERAGED LEASE meaning & explanation
What is LEVERAGED LEASE? What does LEVERAGED LEASE mean? LEVERAGED LEASE meaning - LEVERAGED LEASE definition - LEVERAGED LEASE explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. SUBSCRIBE to our Google Earth flights channel - https://www.youtube.com/channel/UC6UuCPh7GrXznZi0Hz2YQnQ A leveraged lease or leased lender is a lease in which the lessor puts up some of the money required to purchase the asset and borrows the rest from a lender. The lender is given a senior secured interest on the asset and an assignment of the lease and lease payments. The lessee typically makes payments directly to the lender as the lease payments are assigned to the lender. The term may also refer to a lease agreement wherein the lessor, by borrowing funds from a lending institution, finances the purchase of the asset being leased. The lessor pays the lending institution back by way of the lease payments received from the lessee. Under the loan agreement, the lender has rights to the asset and the lease payments if the lessor defaults. In this type of lease, the lessor provides an equity portion (often 20% to 50%) of the equipment cost and lenders provide the balance on a nonrecourse debt basis. The lessor receives the tax benefits of ownership.
Views: 1342 The Audiopedia
Finance vs. Operating Lease (Lessee's Perspective)
This video shows how the accounting for a lease would be different if the lessee used a finance lease vs. an operating lease under the new lease rule. With either classification, the lessee would initially recognize a right-of-use asset and a liability for the lease payments. Each time a lease payment is made, the lease liability would decrease. The expenses recognized each period, however, are different depending on whether the lease is a finance lease or an operating lease. With a finance lease, the lessee will separately recognize interest expense and amortization expense each period, and the total of these two expenses will be higher in the early years of the lease and lower in the later years of the lease. With an operating lease, in contrast, the lessee just recognizes one expense account called lease expense each period for the amount of the lease payment. The lease expense is the same amount each period, and it accounts for both interest accrued on the lease liability and amortization. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 10059 Edspira
Capital Aviation -  Introduction to Aircraft Leasing 2017
An introduction to Aircraft Leasing by Capital Aviation which provides an overview of finance, leasing and investment within the aviation industry in the coming years.
Views: 9834 Capital Aviation
What is BOND LEASE? What does BOND LEASE mean? BOND LEASE meaning, definition & explanation
What is BOND LEASE? What does BOND LEASE mean? BOND LEASE meaning - BOND LEASE definition - BOND LEASE explanation. SUBSCRIBE to our Google Earth flights channel - http://www.youtube.com/channel/UC6UuCPh7GrXznZi0Hz2YQnQ?sub_confirmation=1 Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. In United States real-estate business a Bond Lease, often referred to as an "Absolute Triple Net Lease", "True Triple Net Lease", or even a "Hell-or-High-Water Lease" is the most extreme form of the NNN Lease, in which the tenant is responsible for every fathomable real estate risk relaunched to the property and is responsible for every single property related expense, even in instances of a material casualty/condemnation. The term bond or bondable is primarily used in higher structured lease forms which also include a requirement that the tenant completely backstop casualty and condemnation loss in addition to assuming all other payment and performance obligations generally associated with a standard triple net lease. At first glance a bond lease may appear identical to a triple net lease, as the tenant is usually responsible for paying all the property taxes, insurance, and maintenance under both lease structures; however in a bond lease the tenant is obligated to rebuild after a casualty (acts of God included) or continue paying rent should the property be condemned. Further, the tenant cannot terminate the lease or seek any rent abatements. Should a material casualty or condemnation occur (a 50% threshold is generally utilized) resulting in the tenant's inability to restore the property to operable condition of its original intended use, tenant may only attempt to terminate the lease upon delivering a rejectable purchase offer which is usually calculated to cover any debt as well as provide a return of any equity. Further, tenant is responsible for all environmental matters, no matter what the cause. It has been argued that following a major casualty or irreparable condemnation, the tenant isn't required to continue paying rent without abatements, even under a bond lease. The argument follows that under certain circumstances such a material event may even be construed as "constructive eviction" ultimately allowing the bond tenant to walk away from the property without providing a rejectable offer or other termination payment provision. Examples of case law exist however; which uphold the "hell or high water" clause as well as the constructive eviction argument. When analyzing any commercial lease it is always advisable to have the lease reviewed by legal counsel and pay close attention to the local state real estate laws.
Views: 18 The Audiopedia
IFRS 16 Leases
http://www.ifrsbox.com The short summary of the new lease standard IFRS 16 Leases. For more information, please visit http://www.ifrsbox.com
Views: 119287 Silvia M. (of IFRSbox)
PwC's Analysing IFRS 16 Leases - 4. Variable lease payments
Learn more at http://www.pwc.com/ifrs16 This is the fourth video in a series on the key issues in implementing the new leases standard IFRS 16. In this video, Holger Meurer one of the more complicated elements of the new standard, variable payments depending on a rate or index and in substance fixed payments. Subscribe to receive more videos in the series. In our next video we look at transition requirements of the new standard - see https://www.youtube.com/watch?v=6HzFlue0xhQ. For more information about IFRS 16 see our In depth (https://inform.pwc.com/s/IFRS_16_A_new_era_of_lease_accounting_PwC_In_depth_INT2016_01/informContent/1647022702109561) and other publications (https://inform.pwc.com/inform2/s/IFRS_16_Leases/informContent/1622044502155584) on PwC's Inform (http://inform.pwc.com). A full playlist of our Analysing IFRS 16 videos is also available. https://www.youtube.com/playlist?list=PL1LkGy008IwzPaIgGWawxU4FseYeBnPZR You might also be interested in our 'Temperature check' video on how companies are progressing in their implementation plans. https://www.pwc.com/gx/en/services/audit-assurance/ifrs-16-the-new-leasing-standard.html
Views: 2716 PwC's Inform
Prime Lease op pay
General description of my settlement
PwC's Analysing IFRS 16 Leases - 1. Definition of a lease
Learn more at http://www.pwc.com/ifrs16 The new leases standard introduces a new model of accounting for lease contracts that will have a huge effect, particularly for lessees. This is the first of a series of videos from PwC's IFRS 16 specialists which will take a look at the requirements of the standard, including how specific industries might be impacted. In this video, Derek Carmichael provides an overview of the new definition of a lease and the key issues to consider in assessing whether that definition is met. Subscribe to receive more videos in the series. In our next video we look at how the Pharmaceutical and Life sciences industry might be impacted. For more information about IFRS 16 see our In depth (https://inform.pwc.com/inform2/s/IFRS_16_A_new_era_of_lease_accounting_PwC_In_depth_INT2016_01/informContent/1647022702109561) and our topic home page (https://inform.pwc.com/inform2/s/IFRS_16_Leases/informContent/1622044502155584) on https://inform.pwc.com/.
Views: 15753 PwC's Inform
Lease Capitalization Pt 2 – Capital, Income, Profitability, and FCF Adjustment Explained
In this 3-part video series, we cover the conversion of operating leases to capital leases, a process known as the “lease capitalization”. In this second video, we learn about the Capital, Income, Profitability, and FCF Adjustments necessary in order to conduct a fair analysis of the company. These adjustments impact the EBITDA, EBIT, Net Income, Net Debt of the company and enterprise value. We will go through multiple examples applying what we learned in Pt 1 with regards to imputed interest and depreciation. The big reason why bankers capitalize leases centers on comparing one company to another. If Company A owns operating leases, off-balance sheet financing, and Company B owns capital leases, comparing EBITDA or EBIT multiples will be unfair. By adjusting the operating expense of an operating lease and calculating the imputed interest and depreciation associated with the present value of the liability, multiples of EBIT and EBITDA will more accurately reflect the true financial state of the company. Definitions: Operating Lease – Agreement which is signed for a period much shorter than the actual life of the asset while the PV of lease payments are generally much lower than the actual price of the asset. Capital Lease – Agreement which generally lasts the entire life of the asset with the PV of lease payments covering the price of the asset. Oftentimes cannot be cancelled and has an option to buy the asset at a favorable price. Great reading materials for topic of lease capitalization; http://people.stern.nyu.edu/adamodar/pdfiles/papers/oplev.pdf If you have any other questions, please comment below. If you enjoyed the video and found it helpful, please like and subscribe to FinanceKid for more videos soon! For those who may be interested in finance and investing, I suggest you check out my Seeking Alpha profile where I write about the market and different investment opportunities. I conduct a full analysis on companies and countries while also commenting on relevant news stories.
Views: 385 FinanceKid
Leasing - Accounting for variable lease payments
Learn more at PwC.com - https://pwc.to/2FgEShv Variable lease payments may impact what a lessee presents on its balance sheet under the new standard. PwC explains how in this video. *Transcript text has been reduced for space restrictions. Watch the full video for the complete information. We’re continuing our leases video series with a discussion on variable lease payments. These payments will impact lease measurement and classification for a lessee under the new leases guidance. A lease liability and a right-of-use asset will be recorded on the lessee’s balance sheet for virtually all of its leases. In this video I’ll cover: What are variable lease payments; Which of these payments are included when you measure and classify the lease; and How to account for changes in these payments. What are variable lease payments? They’re any payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than for the passage of time. Variable lease payments are broken down into two categories. The first category is payments that change based on an index or a rate, such as the consumer price index, or “CPI”, or a benchmark interest rate, such as LIBOR. The second category is all other changes, such as factors based on usage or performance. The second category includes payments based on the use of the leased asset, such as payments based on excess mileage under a car lease. Or payments based on performance, for example, when a company has to pay the lessor a percentage of its sales in a retail store lease. Only the first category, that is, variable lease payments based on an index or a rate, are included when measuring and classifying a lease. So how does a company include a payment that’s going to change over time when it doesn’t know the actual amount that will be paid over the lease term? Well, the company should use the index or rate at lease commencement for all of the payments throughout the lease term. Any subsequent change from the original index or rate would be treated as variable lease expense. The lease liability should NOT be remeasured when the index or rate changes. The only time that it would be updated is when the lease liability is remeasured. For example, if there was a contract modification that’s not accounted for as a separate contract or a change in the assessment of lease term. Let’s illustrate this by walking through an operating lease example: · Say a company is leasing retail space for 5 years. · The company is required to make an annual lease payment at the beginning of each year. According to the lease agreement, the payment is calculated as $4,000 times the prior year’s CPI. · The prior year CPI was 250 at lease commencement. · So the initial payment due at lease commencement is calculated as $4,000 * 250, or $1 million. · The lease payment will be used to measure and classify the lease because the payment is based on an established index. · But the annual payment will change every year as CPI changes. So what amounts should be used for each year’s annual payment? · Well, the company needs to use the index at lease commencement that is a CPI of 250, to calculate the annual lease payments for the entire lease term. · So the amount of the lease payments would be $1 million per year, or $5 million for the entire five year lease, which will be used to calculate the straight line lease expense. · The company will record the lease liability at the present value of the four remaining $1 million payments due during the lease term. The right-of-use asset will equal that amount plus the initial $1 million payment. So what happens when the lease payment changes in year 2? · Let’s say that CPI for the following year was 255. This results in the second year payment to be calculated as $4,000 * 255 or $1,020,000 at the beginning of year 2. · How should the company account for that payment? · One million dollars is already factored into the lease liability and the straight-line lease expense because that part of the payment was based on the CPI at lease commencement. · The additional $20,000 should be recorded as variable lease expense in the period in which it is payable. With the effective date of the new leases standard quickly approaching, companies will have a lot of work ahead of them getting ready for the new guidance. But the good news is there are many resources available to help. For more information, please refer to the Leases page on CFOdirect.com.
Views: 5242 PwC US
How to calculate interest rate implicit in the lease
http://www.ifrsbox.com Video tutorial on how to calculate interest rate implicit in the lease, or internal rate of return. Get "Top 7 IFRS Mistakes" report and e-mail updates at http://www.ifrsbox.com
Views: 71960 Silvia M. (of IFRSbox)
Capital Lease Vs Operating Lease
Lease is agreement between owner of property and the person who wants to use of same property. It is contract of rent of any fixed asset. 1. Definition Capital lease is the lease on the basis of rules 1) Ownership of asset will transfer at the end of lease or 2) It allows lessee to buy same leashold asset the price less than fair market value at the end of lease. In operating lease, there is not such rule. Both reward and risks will be of owner instead lessee. 2. Plan Capital lease is the plan to buy asset in the installment So, lease property will be an asset and if there will be any default, it will be liability of lessee. Operating lease is just agreement of rent property. Ownership will not transfer. All default in property will be of owner. He is responsible and it is his liability. 3. Lease Term In Capital Lease 75% of total active life of asset must be under lease term. Means capital lease contract should not short term. It should be long term. It is condition. In Operating Lease In operating lease, lease contract may be short term. 4. In Financial Statement In Capital lease We will show total value of asset in balance sheet as fixed asset For example, asset value is Rs. 10,00,000 It will be shown in the asset side in the beginning of lease agreement and same amount will be as liability by showing lease payable account In operating lease We will not show it in balance sheet of lessee. We will show only in income statement. When we pay the lease amount, it will be expense like paying of other operating expenses like rent, internet bill and electricity bill. 5. Installment Rule In capital lease When we pay the lease amount, it will apply installment rule following entry will pass In above example, we have taken capital lease of machine of Rs. 10,00,000. We have decided to pay Rs. 5000. Now, because at the end of lease, this will be the asset of lessee. So, lessee will show installment as ( principle + interest ) like payment of any other loan. lease payable account debit interest account Credit (interest on principle ) Bank account Credit ( Principle of installment ) In operating lease This rule will not apply
What is SYNTHETIC LEASE? What does SYNTHETIC LEASE mean? SYNTHETIC LEASE meaning & explanation
What is SYNTHETIC LEASE? What does SYNTHETIC LEASE mean? SYNTHETIC LEASE meaning - SYNTHETIC LEASE definition - SYNTHETIC LEASE explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. SUBSCRIBE to our Google Earth flights channel - https://www.youtube.com/channel/UC6UuCPh7GrXznZi0Hz2YQnQ A synthetic lease is a financing structure by which a company structures the ownership of an asset so that – for financial accounting purposes (under pre-2003 U.S. financial accounting rules), the asset is owned by a special-purpose entity and leased to the operating company under an operating lease. The special-purpose entity is usually owned by the lessee / operating company, and is given just enough independence so that it can be taken off the operating company's balance sheet. The asset is thus recorded as an asset on the balance sheet of the special purpose entity, not of the lessee / operating company. Thus, depreciation of the asset need not be charged against income of the operating company. Instead, the lease payments are recorded as an expense on the income statement. for tax purposes, the asset is owned by the operating company (or the special-purpose entity is consolidated with the operating company, so that the two are treated as a single entity for tax accounting purposes). Thus, the operating company can deduct depreciation of the asset for tax purposes, generally on an accelerated depreciation schedule. Effectively, the asset is owned indirectly by the lessee / operating company, and the company leases the asset to itself. The post-Enron rules of the Financial Accounting Standards Board, which require some measure of independence of a special purpose entity from the operating company, and genuine economic substance to the transaction in which the SPE is a party, made it difficult or impossible to structure a synthetic lease SPE, so synthetic leases have essentially passed out of existence. Synthetic leases are considered vulnerable in some jurisdictions to recharacterisation. Generally, the money to finance the asset is borrowed, and the lender takes a security interest against the asset, but has no further recourse against the borrower / operating company.
Views: 205 The Audiopedia
How Do I Pay Myself in a Single-Member LLC? - All Up In Yo' Business
Learn more about 180 Law Co. LLC by visiting http://180lawco.com. One question that I get asked quite often, because it’s a really good question, is how the owner of a single-member LLC is supposed to pay him/herself. There are two possible answers to this question, depending on how the LLC is taxed. Unless the LLC elects otherwise, a single-member LLC is considered a “disregarded entity” and all of the income to the LLC is treated as income to the business owner, and is all subject to self-employment tax. So basically, the owner of a single-member LLC can pay himself however and whenever he wants, keeping in mind a few important considerations: 1. Make sure you are prepared to pay taxes. Since the LLC is a disregarded entity, if the business earns $100k but you only “pay” yourself $50k, you are still going to be responsible for paying all of the taxes, including self-employment taxes, on the full $100k. (For simplicity’s sake, I am pretending there are no deductions or anything.) So you need to set aside enough money to make sure you can cover your taxes. 2. The business has to remain adequately capitalized. This means that you need to keep enough money in the business to cover all your overhead, debts, bills, salary for employees, etc. You should also leave some extra “padding” for possibly building up your business, purchasing equipment, and whatever else you may decide to do with your business. In the books, any payments to yourself should be recorded as “Member Distribution” or “Member Withdrawal.” If the LLC elects to be taxed as an S Corporation, on the other hand, you have to be paid a “reasonable” salary. Self-employment taxes will only be paid on that salary rather than on the full amount of profit the business earns. Any money that the business owner takes above that reasonable salary is considered a dividend and won’t be subject to self-employment taxes. To learn more about S Corporations, watch my earlier video What the Heck is an S Corporation at http://youtu.be/i5to7Da3wMw?list=UUNh7tqEn68tf0oOfq4NsFsg If your LLC is not taxed as an S Corp, you don’t need to put yourself on payroll, since those member distributions aren’t treated as normal payroll. If your LLC is taxed as an S Corp, then the salary you earn can be part of your payroll, and any additional dividends will be separate from that. Whether or not you elect to have your LLC taxed as an S Corp and how to handle and record the money that you pay yourself is an important conversation that should be had with your accountant, bookkeeper, & attorney. Doing it the “right” way can help minimize your tax liability and can make your life (and that of your accountant) much easier come tax time. Contact Aiden and learn more at www.180lawco.com. [email protected] | 720-379-3425 Thumbs up & subscribe if you want more AUIYB! Follow Me! IG: @allupinyobusiness Twitter: @_AllUpInYoBiz www.facebook.com/180lawco www.google.com/+aidenkramerlawAUIYB www.pinterest.com/AUIYB The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by 180 Law Co. LLC, with its principal office located at 50 S. Steele Street, Suite 250, Denver, CO 80209. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship 180 Law Co. LLC or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice. All Up In Yo’ Business® is a registered trademark of 180 Law Co. LLC. ©180 Law Co. LLC. All rights reserved.
Views: 356642 180 Law Co. LLC
What is CLOSED-END LEASING? What does CLOSED-END LEASING mean? CLOSED-END LEASING meaning - CLOSED-END LEASING definition - CLOSED-END LEASING explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. Closed-end leasing is a contract-based system governed by law in the U.S. and Canada. It allows a person the use of property for a fixed term, and the right to buy that property for the agreed residual value when the term expires. Closed-end leases are so called because they run for a fixed term, and the lessor and lessee agree in the lease contract what the residual value of the property being leased will be. In most cases (particularly in retail motor vehicle leases), the lessee has an option to purchase the property for the agreed residual value at the end of the lease term. Closed-end leases are not used for property which increases in value. In most cases, when a closed-end lease is entered, the lessor does not already own the property being leased. Rather, the lessor agrees to purchase the property for a certain amount (the "capitalized cost") from a third party, such as a car dealer. The lessee will often be required to offer money up front as an offset against the capitalized cost (this is called the "capitalized cost reduction" although it is sometimes erroneously referred to as a "down payment"). The difference between the (adjusted) capitalized cost and the residual value is the depreciation component of the lease cost. In addition to depreciation, the lessee must also pay the lessor's cost of financing the purchase of the vehicle, which is referred to as "rent"; the rent also includes the lessor's profit. The total lease cost can either be paid in a single lump sum, or amortized over the term of the lease with periodic (usually monthly) payments. Closed-end leases generally provide that the lessee is responsible for insuring the property, for maintaining it in accordance with the lessor's requirements, and for paying any taxes or license fees which may be assessed on the lessor as owner of record. Motor vehicle leases generally include a provision for determining the amount of "excess wear and tear" (or "wear and use") at the end of the lease term, for which the lessee is responsible upon returning the vehicle. Closed-end leases have become very popular for automobile buyers in North America since the mid-1980s. Shield laws in most states allow lessors to avoid legal responsibility for the actions of their lessees, which has made it practical for automakers to offer leases direct to consumers without fear of "deep pockets" liability for injuries resulting from an accident. In those states which assess a use tax on vehicles, lessees need only pay tax on the amount of their lease payment, not on the entire value of their vehicle at the time of purchase. Finally, and most significantly, because lessees pay only for depreciation and financing, and not the entire retail cost of the vehicle, payments can be significantly lower than in loan-based financing. This allows consumers to significantly shorten their purchase cycle, increasing new-vehicle sales, which gives the automakers reason to emphasize leasing programs in their marketing. Closed-end leases are not always the best choice for consumers. The finance companies which offer consumer car leases frequently require lessees to hold more costly insurance policies than would otherwise be necessary. Automakers often view leasing as a sales tool, and artificially inflate the lease-end residual value; this can make exercising the purchase option at the end of a lease more expensive than simply financing the vehicle over the longer term in the first instance. Finally, because of the increased financial risks undertaken by the lessor, higher credit quality is generally required to enter into a lease than to purchase a vehicle.
Views: 289 The Audiopedia
Lease Accounting For Sales Type Lease (Gross Profit Guaranteed, Ungaranteed Residual)
Accounting for a sales type lease, a sales type lease is similar to direct financing lease except it involves a gross profit or (loss) by lessor (manufacturer or dealer), how to calaculate the gross profit on leasing the asset with (1) guaranteed residual value (estimated fair value of the leased asset at the end of lease) and (2) unguaranteed residual value, with a guaranteed residual value the gross profit equals sales price of the asset (present value of the minimum lease payments plus present value of the residual), sales price minus cost of the asset (COGS) equals the gross profit, with an unguaranteed residual value the gross profit equals sales price (capitalized amount of asset minus the present value of the residual) minus the cost of goods sold (COGS) which is (asset cost minus present value of residual), the difference between guaranteed and unguaranteed residual value is how the sales price and cost of goods sold is calculated, to record the lease (lessors perspective) involves a lease receivable (capital amount of asset), inventory (cost of asset), sales revenue (sales price) and cost of goods sold (COGS), to record residual value at the end of the lease the residual value amount is divided between (fair value of asset + cash) which is returned to lessor, complete accounting example with (T Accounts) by Allen Mursau
Views: 8594 Allen Mursau
What is CROSS-BORDER LEASING? What does CROSS-BORDER LEASING mean? CROSS-BORDER LEASING meaning - CROSS-BORDER LEASING definition - CROSS-BORDER LEASING explanation. SUBSCRIBE to our Google Earth flights channel - http://www.youtube.com/channel/UC6UuCPh7GrXznZi0Hz2YQnQ?sub_confirmation=1 Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. Cross-border leasing is a leasing arrangement where lessor and lessee are situated in different countries. This presents significant additional issues related to tax avoidance and tax shelters. Cross-border leasing has been widely used in some European countries, to arbitrage the difference in the tax laws of different jurisdictions, usually between a European country and the United States. Typically, this rests on the fact that, for tax purposes, some jurisdictions assign ownership and the attendant depreciation allowances to the entity that has legal title to an asset, while others (like the U.S.) assign it to the entity that has the most indicia of tax ownership (legal title being only one of several factors taken into account). In these cases, with sufficiently long leases (often 99 years), an asset can end up with two effective owners, one in each jurisdiction; this is often referred to as a double-dip lease. Often the original owner of an asset is not subject to taxation in any jurisdiction, and therefore not able to claim depreciation. The transaction often involves a city selling an asset (such as a sewerage system or power plant) to an investor (who can claim depreciation), and long-term leasing it right back (often referred to as a sale leaseback). However, since 2004 cross border leasing has been effectively eliminated by the passage of the American Jobs Creation Act of 2004, which made the vast majority of cross border leases unprofitable. Leasing techniques have been used for financing purposes for several decades in the United States. The practice developed as a method of financing aircraft. Several airlines in the early 1970s were notoriously unprofitable and very capital intensive. These airlines had no need for the depreciation deductions generated by their aircraft and were significantly more interested in reducing their operating expenses. A very prominent bank would purchase aircraft and lease them to the airlines. Because the bank was able to claim depreciation deductions for the aircraft, the bank was able to offer lease rates significantly lower than the interest payments that airlines would otherwise pay on an aircraft purchase loan (and most commercial aircraft flying today are operated under a lease). In the United States, this spread into leasing the assets of U.S. cities and governmental entities and eventually evolved into cross-border leasing. One significant evolution of the leasing industry involved the collateralization of lease obligations in sale leaseback transactions. For example, a city would sell an asset to a bank. The bank would require lease payments and give the city an option to repurchase the asset. The lease obligations were low enough (due to the depreciation deductions the banks were now claiming) that the city could pay for the lease obligations and fund the repurchase of the asset by depositing most but not all of the sale proceeds in an interest-bearing account. This resulted in the city having pre-funded all of its lease obligations as well as its option to repurchase the asset from the bank for less than the amount received in the initial sale of the asset, in which case the city would be left with additional cash after having pre-funded all of its lease obligations. This gave the appearance of cities entering into leasing transactions with banks for a fee. By the late 1990s many of the leasing transactions were with cities in Europe, and in 1999 cross border leasing in the United States was "chilled" by the effective shutdown of LILOs (lease-in/lease outs). (LILOs were significantly more complicated than the typical lease where a municipality (for example) would lease an asset to a bank and then lease it back from the bank for a shorter period of time; LILOs relied on arcane rules of tax accounting to yield significant returns and are currently on a list of transaction types that the U.S. tax authority considers abusive.) Since 2004 cross border leasing has been effectively eliminated by the passage of the JOBS ACT of 2004, which made the vast majority of cross border leases unprofitable for the parties to the leasing transaction.
Views: 115 The Audiopedia
Leasing - Discount rate for the lease liability
Learn more at PwC.com - https://pwc.to/2JBu7d4 The discount rate is used by a lessee to measure liabilities under the new leases standard. As lessees evaluate the appropriate discount rate to use, this video helps cover key factors to consider. *Transcript text has been reduced for space restrictions. Watch the full video for the complete information. Continuing our leases video series with the discount rate that a lessee should use in measuring a lease liability under the new leases standard. We’ll cover: Why the discount rate in a lease matters and how it impacts lease accounting; How the new standard has changed the definition of the incremental borrowing rate or IBR; What can be used as collateral in determining the IBR, and How to determine the term used for the IBR. The discount rate is used to measure the lease liability for an operating lease at transition and for any new operating or finance lease going forward. The discount rate will directly impact the amounts recognized on the balance sheet for lessees. The discount rate will be important to more companies than before. The standard requires companies to use the rate implicit in the lease ... but only if it’s readily determinable. The rate implicit in the lease is the interest rate that causes the aggregate present value of the lease payments and the unguaranteed residual value of the asset … to equal the current fair value of the leased asset less any investment tax credit plus the lessor’s deferred initial direct costs. Usually a lessee won’t be able to readily determine the unguaranteed residual value nor the lessor’s deferred initial direct costs ... so we don’t expect lessees will use the rate implicit in the lease very often. If the lessee can’t readily determine the rate implicit in the lease, it should use its own incremental borrowing rate, or IBR. Now, that’s the same requirement as the current leasing guidance. But the definition of the incremental borrowing rate is different under the new guidance. The new leases guidance defines the incremental borrowing rate as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Now, that’s different from the current guidance……..which requires companies to use a rate that the lessee would have incurred to borrow the funds over a similar term to purchase the leased asset…. and the rate didn’t have to be a FULLY collateralized or secured rate. The rate was usually a weighted average of secured and unsecured rates. Often this was based on what the lessee would pay on debt with characteristics approximating those of the lease, such as a similar loan-to-value ratio. We think that any form of collateral can be used to determine the incremental borrowing rate, so long as it’s a fully-secured rate for a loan with similar payment terms. We don’t think you have to use the leased asset as collateral. And in many cases, you may not be able to use it as collateral. An observable interest rate for an existing secured line could be an acceptable IBR. It may be challenging for some companies to determine a secured borrowing rate for the length of the lease. A company may have secured borrowing arrangements with maturities of 3 years whereas they may have a 10 year lease. Companies may need to start with an unsecured rate and make adjustments to come to a secured rate. Or they may need to start with the term of payments under a borrowing and make adjustments to get to the specific term of the lease payments. It’s also important to consider the timing of when principal payments are made on borrowings relative to the timing of payments for leases. Many borrowings have a bullet payment in which the entire principal is due at maturity. Often, with leases, the portion of the payment that would be allocated to the principal occurs over the life of the lease as it’s an amortizing amount … which makes the weighted average life shorter. A shorter weighted average life typically results in a lower interest rate. Therefore, understanding the payment terms is important in determining the IBR. As an example, a 5 year borrowing with the entire principal payable at year 5 could have a different and usually higher interest rate than a 5 year borrowing where some of the principal is payable in installments at each payment date over the 5 years. For more information, please refer to the leases section on CFOdirect.com.
Views: 8158 PwC US
What is Residual Value - in Car Leasing
Learn how residual values are important in car leasing. For more details, see http://LeaseGuide.com
Views: 22079 LeaseGuide.com
Lease Accounting Basic Example To Determine Lease Type (Capital Vs Operating Lease)
Accounting for leases to determine whether the lessee should account for the lease as a capital lease or an operating lease, example includes detailed amounts for the lease arrangement (lease payments, lease term in years, assets economic life in years, bargain purchase option, fair market value of asset, cost of asset, incremental interest borrowing rate, present value of minimum lease payments, etc.), based on the example while using capitalization criteria testing decision diagram for lessee, tests are applied to determine if the lease meets one or more of the four test criterias for the lessee, (1) transfer of ownership, (2) bargain purchase option, (3) lease term geater than 75 percent of economic life of leased asset and (4) present value of lease payments greater than 90 percent of fair value of leased asset, if any one or more of the test criterias are met the lease would be classified as a capital lease and if none of the test criterias are met the lease is classified as an operating lease, detailed accounting calculations by Allen Mursau
Views: 38262 Allen Mursau
What is RESIDUAL VALUE? What does RESIDUAL VALUE mean? RESIDUAL VALUE meaning & explanation
What is RESIDUAL VALUE? What does RESIDUAL VALUE mean? RESIDUAL VALUE meaning - RESIDUAL VALUE definition - RESIDUAL VALUE explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. Residual value is one of the constituents of a leasing calculus or operation. It describes the future value of a good in terms of absolute value in monetary terms and it is sometimes abbreviated into a percentage of the initial price when the item was new. Example: A Honda is sold at a list price of $20,000 today. After a usage of 36 months and 50,000 miles its value is contractually defined as $10,000 or 50%. The credited amount, on which the interest is applied, thus is $20,000 present value minus $10,000 future value. Residual values are contractually dealt with either in terms of closed contracts or open contracts. In accounting, residual value is another name for salvage value, the remaining value of an asset after it has been fully depreciated. The residual value derives its calculation from a base price, calculated after depreciation. Residual values are calculated using a number of factors, generally a vehicles market value for the term and mileage required is the start point for the calculation, followed by seasonality, monthly adjustment, lifecycle and disposal performance. The leasing company setting the residual values (RVs) will use their own historical information to insert the adjustment factors within the calculation to set the end value being the residual value. In accounting, the residual value could be defined as an estimated amount that an entity can obtain when disposing of an asset after its useful life has ended. When doing this the estimated costs of disposing of the asset should be deducted. The formula to calculate the residual value can be seen with the next example as follows: A company owns a machine which was bought for €20,000. This machine has a useful life of five years which has just ended. The company knows that if it sells the machine now it will be able to recover 10% of the price of acquisition.
Views: 6321 The Audiopedia
ifrs 16 - Meaning of Short Term Lease
The session discusses the relevance of IFRS 16 with reference to meaning of short term lease
Lease Accounting For Residual Values For Lessor (Guaranteed & Unguaranteed Residual)
Accounting for lease residual values for guaranteed and unguaranteed residuals, residual value is the estimated fair value of leased asset at end of lease term, its an additional lease payment lessee will pay at end of lease term (lease receivable for lessor), example is based on the lessor's perspective, lessor uses the same amortization schedule for guaranteed or unguaranteed residual value, include residual value even if unguaranteed for calculating the capitalized amount of the lease (lessor includes residual whereas the lessee would not if its unguaranteed), capitalized amount of the lease is based on the present value of the minimum lease payments and the present value of the residual value (guaranteed or unguaranteed), by definition a guaranteed residual value has more assurrance of realization than an unguaranteed residual value, the lessor may adjust the lease payments (ROI) because of the uncertainty of recovery, after establishing the ROI rate it makes no difference if the residual is guaranteed or unguaranteed for accounting purposes by the lessor, example includes setting up the lease amortization schedule and balance sheet entires (T Accounts) for the lessor based on a direct financing lease to show how the lease residual value is recorded, detailed accounting example by Allen Mursau
Views: 9640 Allen Mursau
PwC's Analysing IFRS 16 Leases - 7. Lease term
Learn more at http://www.pwc.com/ifrs16 This is the seventh video in a series on the key issues in implementing the new leases standard IFRS 16. In this video, Derek Carmichael and Holger Meurer discuss the definition of lease term, the new guidance on what is "reasonably certain" and when reassessment of the lease term is required. Subscribe to receive more videos in the series. In our next video we look at lessor accounting under the new standard. For more information about IFRS 16 see our In depth (https://inform.pwc.com/s/IFRS_16_A_new_era_of_lease_accounting_PwC_In_depth_INT2016_01/informContent/1647022702109561) and other publications (https://inform.pwc.com/inform2/s/IFRS_16_Leases/informContent/1622044502155584) on PwC's Inform (http://inform.pwc.com). A full playlist of our Analysing IFRS 16 videos is also available. https://www.youtube.com/playlist?list=PL1LkGy008IwzPaIgGWawxU4FseYeBnPZR You might also be interested in our 'Temperature check' video on how companies are progressing in their implementation plans. https://www.pwc.com/gx/en/services/audit-assurance/ifrs-16-the-new-leasing-standard.html
Views: 1932 PwC's Inform
Leasing - Determining the lease term
Learn more at PwC.com - https://pwc.to/2JBu7d4 Upon adoption of the new leases standard, companies will bring virtually all leases onto the balance sheet. The lease term is one of the key inputs that can impact the classification and measurement of a lease. Identifying the lease term may not always be as simple as it seems, and getting this wrong could have a significant impact on a company’s accounting under the new leases guidance. Key considerations for determining the term of a lease and the relationship between the lease term and the short term lease exception that is available for lessees. *Transcript text has been reduced for space restrictions. Watch the full video for the complete information. To determine the lease term, first, start with the non-cancelable period of the lease. Then, add any renewal option periods for renewals the lessee is reasonably certain of exercising. Third, add any periods covered by a termination option if the lessee is reasonably certain it will NOT exercise that option. Fourth add any periods from an option to extend (or not terminate) the lease that are controlled by the lessor. The sum of these four items equals the lease term. You may have noticed that the treatment of renewal and termination options depends on whether the lessee is reasonably certain to exercise the option. So that begs the question, what exactly does "reasonably certain" mean? The good news is that the concept of “reasonably certain” in the new leases guidance is the same as “reasonably assured” in the current guidance. The determination of whether exercise of an option is reasonably certain is based on factors at the lease commencement date that would create an economic incentive for the lessee either to exercise or to not exercise the option. Examples of factors that could create economic incentives include: - the pricing of a lease renewal option below market rates -significant leasehold improvements that would be impaired if the term was not extended -lease termination or relocation costs that would be avoided by extending the lease; and -the importance of the leased asset to the lessee’s operations in avoiding any business interruption. Evaluating renewal and termination options requires judgment, but it is a key step in determining the lease term. This judgment is critically important to assessing lease classification and measurement. The lease term also determines whether a lease qualifies for the short term lease exception, which could provide relief to lessees upon adoption of the new standard. The new leases guidance provides a short term lease exception in which lessees may elect to NOT apply the new recognition guidance for short term leases. This election should be made by class of underlying asset, so, foe, leases of office space or leases of office equipment. If a lessee chooses to elect the short term lease exception, it would NOT recognize a right of use asset or lease liability on its balance sheet and instead would recognize the lease payments as an expense on a straight-line basis over the lease term, consistent with the current leases guidance. Exactly what qualifies as a “short term lease”? As defined in the new guidance, a short term lease is a lease that, at the commencement date, has a lease term of 12 months or less and does NOT include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The evaluation of whether a lease qualifies as short term is based on the contractual lease term at the commencement date. This evaluation is NOT based on the remaining lease term at the time a lessee adopts the new leases guidance. The second point to highlight is that to qualify for this exception, the lease term must be 12 months or less. We believe that this definition should be applied strictly and should consider the impacts of renewal and termination options. In summary, it’s critical to understand and evaluate all provisions in each lease agreement. Small changes can impact if a lease qualifies as a short term lease, which may affect a lessee’s accounting for the arrangement. As companies prepare to apply the new guidance to their lease portfolios, they will be making many judgments that will impact the classification and measurement of right of use assets and lease liabilities. Determining the lease term, and identifying leases that qualify for the short term lease exception, are just a couple of these judgments. For more information, please refer to the Leases page on CFOdirect.com
Views: 6123 PwC US
What is GOLD LEASING? What does GOLD LEASING mean? GOLD LEASING meaning, definition & explanation
What is GOLD LEASING? What does GOLD LEASING mean? GOLD LEASING meaning - GOLD LEASING definition - GOLD LEASING explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. SUBSCRIBE to our Google Earth flights channel - https://www.youtube.com/channel/UC6UuCPh7GrXznZi0Hz2YQnQ Gold leasing is a practice whereby central banks and other financial institutions lend gold out on an unsecured basis. Gold leases have to be distinguished from gold swaps. In a gold swap, one bank gives gold to another bank as collateral and borrows currency (usually US dollars). In a gold lease, by contrast, one bank loans gold to another bank and does not ask for any collateral. The gold lease rate is simply the interest rate charged to a gold borrower when the loan is paid back. There is no publicly available database that announces what the gold lease rate is. However, the theory of interest rate differentials implies that the gold lease rate should be equal to US dollar LIBOR minus the gold forward offer rate (GOFO). Prior to January 30, 2015, the LBMA calculated the implied gold lease rate each day and published it on its website. However, it stopped publishing the info on its website after this date. Since then, many investment bloggers have tried to provide updated calculations of this rate, with mixed success. Gold leasing has often been accused of being a kind of "price manipulation" whereby central banks artificially increase the supply of gold. However, defenders of the practice say that it is simply a way for central banks to earn interest on gold that would otherwise be unproductive.
Views: 121 The Audiopedia
Leasing - Identifying embedded leases under the new standard
Learn more at PwC.com - https://pwc.to/2JBu7d4 A contract may have an embedded lease. Identifying all leases, including embedded leases is critical under the new leases standard (ASC 842) since virtually all leases will be on a lessee’s balance sheet. The new lease identification guidance is different from the existing model. Companies will need systems and processes to identify leases. Hello, I am Ashima Jain, a Managing Director in PwC’s national office. In this video, I will spend a few minutes discussing how to determine whether an arrangement is, or contains, a lease under the new leases standard. It is important to realize that even though an arrangement may not be a lease in form, it could still be within the scope of lease accounting. And determining whether an arrangement is a lease or contains a lease is likely to be much more important than previously because, under the new leases guidance, virtually all leases will be on a lessee’s balance sheet. Now, identifying whether there is a lease is different from the current accounting guidance. At a high level, under the current guidance an arrangement is a lease, or contains a lease, if the customer (that is, the potential lessee) has either: ● the right to control the use of a specified asset, or ● obtains substantially all of the asset’s economic benefits. But under the new guidance both these conditions must be met. In other words, the new guidance requires an “and” not an “or”. The lease identification analysis is required to be done at the inception date of the arrangement which is the same as under the current guidance. While there is no definition of inception date in the new guidance, we believe that the definition in the current guidance should generally be used. That means, the inception date is the date when the arrangement is signed or when a written commitment, which has the principal terms and conditions, is signed. Let’s now go through in more detail the criteria that need to be met for an arrangement to be, or contain, a lease for accounting purposes. Let’s look at a flowchart . For an arrangement to be, or contain a lease, the underlying asset in the arrangement should be identified. And to be identified: ● An asset must be specified either explicitly, that is the arrangement specifies the asset, or implicitly, meaning once it is made available for use. AND ● The supplier (that is, the potential lessor) must not have a substantive right to substitute the asset with alternative assets to fulfill the arrangement. An arrangement that does not contain an identified asset is not a lease. The customer (that is, again, the potential lessee) should also have the right to substantially all of the economic benefits from the use of the asset throughout the period of use. If not, the arrangement is not a lease. The customer and supplier must also determine who has the right to direct how and for what purpose the asset is used. If the customer has this right and if all other conditions are met, the arrangement is or contains a lease. If not, the arrangement is not a lease. Now sometimes the relevant decisions about how and for what purpose the asset is used are predetermined. In that case, the customer has the right to direct how and for what purpose the asset is used if the customer either: ● has the right to operate or direct the operations of the asset, or ● The customer has designed the asset (or specific aspects of the asset) that predetermines how and for what purpose the asset will be used. Remember, although we have covered the criteria sequentially, they do not need to be followed in any particular order. Inventorying arrangements that are not a lease in form, and analyzing them for embedded leases can be a challenging and a time consuming exercise. Many common arrangements such as ● Outsourced arrangements for business operations and support, ● Supply arrangements, ● Data center, hosting and other IT arrangements may contain embedded leases. There could also be other arrangements that contain embedded leases. So companies will need to build identifying a lease as a step into their systems and processes or fine tune their systems and processes as they prepare to adopt the new leases standard. For more information on lease accounting, please refer to our leases guide available on CFOdirect.com. Thank you.
Views: 4537 PwC US
IBM TRIRIGA Lease Accounting - 10.5.0 Partial Payments
0:00 Introduction 0:13 Agenda 0:40 Partial Payment & Straight Line Enhancements 1:02 Partial Payments (Non-Monthly) 4:11 *DEMO* 27:21 Straight Line (Non-Monthly) 36:20 *DEMO* 1:47:54 Patch Helpers 1:52:55 End
Views: 832 Jay Manaloto
What Is The Definition Of Leasing A Car?
What is vehicle leasing? Car leasing explained a car money advice service. Readyforzero buying vs leasing a car class "" url? Q webcache. At the end of a lease's term, lessee must either return vehicle to or buy it from owner monthly payments are lower when you lease because 'buyout' portion owe that means can get into more expensive car for is method obtaining new used involves only paying car's actual cost as opposed having pay in its 7 jun 2017 better car? Which important building ownership value and off your vehicle, even though leasing essentially rent an agreed amount time fixed fee. Car buying terms glossary car and driver. What is full service vehicle lease? Definition and meaning car dealer terminology explained part 2 leasing a new tfs nelson toyota. Encyclopedia car leasing glossary how to lease a buy new loan or lease? Newcars what are off cars? Autos. Both come with strings attached, so make definition of leasing a car our online dictionary has information from everyday finance economics, personal money management, and before you hit the dealerships, arm yourself tools need to understand. Leasing a car typically means finance lease or is commercial product. What is the definition of a car lease (finance stratton finance. The 'residual value' of leasing edmunds. Googleusercontent search. Leasing a car dictionary definition of leasing. What is a car lease? Lease vs buy explained by leaseguide. In fact, many customers find they can lease a new vehicle for less than the 30 apr 2009 when you vehicle, might hear term residual value mentioned by let's start with simple definition of. In fact ideal for people who want to finance more expensive or premium cars. The customer who leased the car (commonly referred to as definition of full service vehicle lease that includes fuel, emergency roadside repairs, preventive maintenance, scheduled servicing, courtesy vehicle, and 10 apr 2013 keep in mind many advertised deals are subsidized leases, meaning auto manufacturer determines, advance, a lower monthly payment often means you can get 'more car' for your money. Lease purchase is a form of conditional sale agreement, which means that the regular (net) capitalized cost leasing term sum total being financed through lease vehicle price plus any extras and minus. Leasing a car what's the smarter choice blog. Below are common car leasing terms and their definitions the loan or lease section in our how to buy a new guide, along with most contracts define 'normal wear tear' mean that if you have any explanation of auto leases, an arrangement which individual borrows for certain term rather than purchasing it outright 7 oct 2013 off cars vehicles reached end contract. 24 mar 2014 if you don't have a lot of cash flow, leasing a car can be a good move until you're able to increase your income. What is the definition of a car lease (finance stratton financeleasing what's smarter choice what financeshould you or buy car? Gail vaz oxlade. Q what is lease purc
Views: 36 Cynthia Cynthia
Hire Purchase Accounting - Basic Concepts | B. Com - Financial Accounting | Stay Learning | (HINDI)
In this Chapter we will Learn 1) Calculation of Cash Price, interest, instalments in different cases 2) Journal entry in the book of Hire Purchase and Hire Vendor 3) Ledgers in the book of Hire Purchase and Hire Vendor 4) Small Value Items 5) Hire Purchase Trading Accounts 🔴 Buy Now all Video Lectures - http://www.vijayadarsh.com 🔴 Join us on Facebook: https://www.facebook.com/VijayAdarshIndia 🔴 Join us on Google+: https://plus.google.com/u/0/+VIJAYADARSH 🔴 Website: http://www.vijayadarsh.com 🔴 E-mail: [email protected] 🔴 Contact: +91 9268373738 (Buy Now all Video Lectures) 🔴 Visit Now : http://www.vijayadarsh.com
Views: 46548 StayLearning
Hire Purchase by CA /CMA Santosh Kumar
Demo Lecture of Hire Purchase for Class 11th,Class 12th,B.com,M.com,CA,CMA,CS by CA/CMA Santosh Kumar. Visit https://www.conceptonlineclasses.com/ for full lectures Call us on 7303445575, 9999631597, 8448322142 Like and follow us on facebook- https://www.facebook.com/pages/catego... Link for other Lectures :- Hire Purchase (Stock and Debtor Method):- https://youtu.be/N0kZgfe5qNU
Views: 243055 santosh kumar
IFRS 16: Definition of a lease
The IASB staff have recorded a web presentation discussing the requirements in IFRS 16 Leases relating to the definition of a lease. This is the third in a series of webcasts that the International Accounting Standards Board is providing to support the implementation of IFRS 16. In the webcast, the IASB staff talk through: • the IFRS 16 requirements and application guidance relating to the definition of a lease—including real life examples of application of each of the main elements; • practical differences between IFRS 16 and the previous definition of a lease requirements in IAS 17 Leases and IFRIC 4 Determining whether an Arrangement contains a Lease; and • how entities should account for contracts that contain both lease and service components. For more information and supporting materials on IFRS 16 please go to: http://www.ifrs.org/supporting-implementation/supporting-materials-by-ifrs-standard/ifrs-16/
Views: 2455 IFRS Foundation
How to Calculate Loan Payments with Excel PMT Function
http://www.contextures.com/excelpmtfunction.html Go to this page to download the free sample file. To calculate a loan payment in Excel, you can use the PMT function. The PMT function calculates the payment for a loan that has constant payments and a constant interest rate. Enter an interest rate, the number of payments, and the loan amount on the worksheet. Then, refer to those cells in the PMT formula. Watch this short video to see the steps for setting up a payment calculation, using the PMT function. Instructor: Debra Dalgleish, Contextures Inc. Get Debra's weekly Excel tips: http://www.contextures.com/signup01 More Excel Tips and Tutorials: http://www.contextures.com/tiptech.html Subscribe to Contextures YouTube: https://www.youtube.com/user/contextures?sub_confirmation=1 '---------------------- Transcript - Calculate Loan Payments with Excel PMT Function In Excel, to calculate monthly payments, you can use the PMT function. In this example, we're going to enter the annual rate, and then the number of payments we have to make, the amount that we'll be borrowing, and then we'll use the PMT function in this cell to calculate the monthly payment. The annual rate that we're going to pay is 5%. In this cell, we're going to borrow the amount over four years. There are 12 months per year, so 48 months. I'll be making 48 payments, and the amount that we're going to borrow is $10,000. Those are the three numbers that we need in order to calculate the monthly payment. Here is the syntax for the PMT function. We'll start by typing equals, and then PMT, open bracket, and now I'm going to click on the cell where I entered the rate. I'll click here where it says 5%, but it's not 5% per month. That's the annual rate. I'm going to click after that cell reference, type a slash for division. then I'll type 12, because we're paying that rate over 12 months. Then I'll type a comma, and the next argument is the number of periods. I'll click on the Number of Payments cell, and type another comma. The present value, or the amount of the loan, is 10,000, so I'll click on that cell. The other two arguments are optional, so I'm not going to use them. The fv is the future value, so that's what you want left at the end of all your payments, and if you don't enter it, we assume zero. We want to pay everything off, so I don't have to enter anything there. The type is also optional. If I omit it, we assume that it's zero, and you're going to be making your payments at the end of the period. If you type a one, then you'd be paying at the beginning of the period. I'll close the bracket and press Enter, and there's the monthly payment. It's in this cell as a negative amount because it's a payment that I owe, but if you wanted to show it as a positive number, just click after the equals sign, right before the PMT function name, and type a minus sign, and press Enter. Now that shows as a positive amount in the payment cell. For more Excel tips and tutorials, and to download the sample file for this video, please visit my Contextures website at www.contextures.com.
Views: 357831 Contextures Inc.
RST Lease Program - The coach weighs in Live
Disclaimer : this is not ment to bash but to answer questions asked by drivers , we do not think the RST LEASE program is bad . The Trucks Coach weighs in on the RST LEASE PROGRAM LIVE . this is in response to several drivers inquiries about the company . RST is leased to the Prime Inc - Prime Advanced Fleet where contractors recueve 80% of the revenue per the RST website . RST / Riverside Transport charges a $350 weekly charge which covers the following charges . 2290, IFTA , PLATES , PERMITS . It also includes the perks of Direct Tv and Sirius XM radio . The costs to the contractor is as set forth and not a true 80% this is not a bad lease just the contractor needs to know what they are paying for : we did not factor in the DTV or XM as a cost because they are not operational expenses but perks .. $300 after operational expenses costs you $3000 = 10% $6000= 5% $9000= 3.3% $12000 = 2.5% $15000= breakeven JASON POAT - THE TRUCKERS COACH ® THE TRUCKERS COACH SHOW THE TRUCKERS COACH RADIO NETWORK Call in to the show 917-889-3079 Email : for show ideas or to be a guest [email protected] Subscribe to us on BLOGTALKRADIO.com/TruckersCoachShow iTunes , podcast1 , google play Our first podcast http://tobtr.com/s/10432549. Truck Drivers - Helping other drivers -ONE DRIVER AT A TIME !! ( it’s what we do ) THE TRUCKERS COACH - is a OWNER OPERATOR and has his own authority running JARHEAD TRANSPORTATION LLC . He travels the USA as a long haul truck driver with his wife Daphne ( Mrs. Coach ) together they run the trucking business and try to help others out here on the road by helpful suggestions and video entertainment. When you see them Driving Marine 01 down the road be sure to go and say hi , they are always willing to talk and even take pictures or answer questions . JOIN OOIDA - ooida.com Business Inquires - Product demos , Branding, : [email protected] Trucking Company Contact ( Loads - Direct Customers , Shipping Rates , Lanes , Brokers . [email protected] Factoring Contact - TRIUMPH BUSINESS CAPITAL MAC GREENE [email protected] Tell Triumph Business Capital - THE TRUCKERS COACH - Jason Poat sent you for a special Factoring rate offer for T- Coach members on RECOURSE and NON RECOURSE factoring options and EFS fuel card options with discounts , low rates and no hidden fees or reserves. YOUTUBE https://www.youtube.com/channel/UCnE5uL3PxLcJd6gZ6ayTqDg FACEBOOK GROUP https://www.facebook.com/groups/TheTruckersCoach/ TWITTER https://twitter.com/truckers_coach TRUCKERS COACH BENEFITS GROUP ( health & life coverage ) https://m.facebook.com/groups/1606212706064922 TRUCKIN PICKERS ( share and sell antiques free ) https://m.facebook.com/groups/123157945049770 Trucking is a tough job and we try to make it easier. We help teach company drivers and owner operators how to be successful in trucking. Proudly serving the following brokers CH ROBINSON TOTAL QUALITY LOGISTICS UBER FREIGHT EPES LOGISTICS SUREWAY DAT SOLUTIONS
IFRS 16 - Lease Modification Example
Session on how to account for a lease modification with the Crowe Leased Asset Calculator under IFRS16.
Views: 866 Luis Lopez
Difference between Occupancy Lands and Lease lands of Maharashtra
Understanding difference between Occupancy lands and Lease lands of Maharashtra : Salil Rameshchandra Occupancy lands The word Occupant creates an impression of being a squatter who does not own the land. It is not so. It is a legal term and it means “owner” as per common language parlance. In the Maharashtra Land Revenue code (MLRC) there is no term called owner or ownership. The revenue officials are taking full advantage of this lack of knowledge and misinformation among people. All definitions are based on “holding “of the lands. The State government is the “universal holder” of lands. Lands being a state subject, all unclaimed lands belong to State Govt. and not Central Govt. It is in the definitions of MLRC that we find the status of lands defined. An occupant / owner is defined under Section 2(23) as: – “occupant ” means a holder in actual possession of unalienated land. The word “holder” is defined under section 2(12) : – “to hold land” or “to be a landholder” or “holder of land” means to be lawfully in possession of land, whether such possession is actual or not. In Bombay High Court Judgement Kanjur Co-operative Housing Society Ltd. Vs. State of Maharashtra, the State Govt. allotted land to the Kanjur Chs and it was held – There are two classes of Occupancy Class-1 lands which are freely transferable. They are free hold lands and all the private lands are considered by the Govt. as class-1 lands. Class-2 lands are lands granted by the Govt. with some conditions. These conditions, the Courts have clarified, were put by the sovereign state to ensure that the lands were properly utilised and were applicable at the time of grant. (Dr.D.R. Bharadwaj vs State of Maharashtra). These restrictions do not make the state govt. the superior holder. In the property card, the name of the CHS only will be reflected. The society should have some documents like conveyance agreement wherein the land is conveyed to him, as an occupant. A CHS can also show receipts for occupancy price, possession letter, GRs, etc to prove its ownership. "SAHAKAR BHANN" channel publishes programs in "Housing & Co-operative" general. It produces documentaries, seminor, interviews of the celebrities and people working at various Housing & Co-operative sector. We seek your support and feedback for producing intellectually stimulating and engaging digital content. Lease lands In a lease land, the property card will reflect the name of the Govt. as the Lessor and the party to whom the land is given on lease as lessee. Many times, even initially, payments were received on auctioned or market rates, apart from the lease rental. In a Bombay High Court judgement, Jaikumari Amarbahadur Singh vs. State of Maharashtra, the court said “If the lease does not keep option to the Government to add, modify, alter or delete, any condition of the lease then the discretion of the Government cannot be taken forward unless the lessee, put in possession of the land, was to accept such change. Similarly, if there is renewal clause in the lease the Government will be obliged to renew the lease in the same terms and conditions.”
Views: 671 sahakar bhann
Buying Versus Leasing A Car
For more information on Buying and Leasing cars, go to: http://www.findthebestcarprice.com/buying-vs-leasing-a-car/ Buying versus Leasing How do you decide whether to buy or lease a car? The real answer....you guessed it...it depends. It depends on your typical behavior and on your financial and business situation, to start. A lease may be right for you if: 1. You upgrade every 3-4 years 2. You own a business which can make the payments 3. You drive less than 15,000 miles a year 4. You want to always be covered by mfr's warranty 5. You want to spend less for car payments (short term) 6. You want to try a vehicle for a while before buying it On the other hand, buying may be right for you if: 1. You rarely buy a new car and you keep yours more than 5 years 2. You look for ways to maximize dollars 3. You drive more than 15,000 miles a year 4. You're able to repay a loan in 5 years or less What Does Leasing Mean, Actually? People who lease cars don't own them. They are actually owned by someone else - the leasing company. It's really a lot like renting. You pay a fee to the owner in order to have use of the vehicle and when the term is up, you give them back the car. If you want an expensive car, leasing might be the only way to obtain it for those who don't have enough cash. This is because the payments are usually significantly lower than a loan payment. Business Alert! If you own a business you can possibly take advantage of some tax deductions including the car payments and the maintenance. This sums it up. If you lease, you can free up some funds now and be driving a "slick" ride. However, beware that you will end up paying more over the long term when you do lease. There are lots of Pros and Cons to buying and to leasing. Want to know what they are? Right below this video there's a link. Click on it. http://youtu.be/7Z2sKFBQq3M
Views: 2102 FindtheBestCarPrice
Business Car and Van Leasing at Evans Halshaw
Business Contract Hire or Business Leasing is the method for businesses to rent a vehicle for a fixed period time (normally 2-4 years) at a fixed monthly cost. This type of vehicle contracts is suitable for soletraders, partnerships and limited companies. The choice of business car lease offers, vans and leasing contract terms are flexible to meet any business requirement. Business Contract Hire is a popular type of contract for VAT registered companies as they are able to reclaim 50% of the finance payments and 100% of VAT on maintenance. Visit our website: http://www.evanshalshaw.com/leasing/ Like Evans Halshaw on Facebook: http://facebook.com/evanshalshaw Follow Evans Halshaw on Twitter: http://twitter.com/evanshalshawuk Be in our circle on Google+: http://plus.google.com/+evanshalshaw
Views: 690 EvansHalshawTV
Leasing - Lessor practical expedient
Learn more at PwC.com - https://pwc.to/2FgEShv The FASB issued a practical expedient for lessors to simplify the accounting for lease and nonlease components. Learn more in this video. *Transcript text has been reduced for space restrictions. Watch the full video for the complete information. Currently under the new standard, entities must separate lease and nonlease components in a contract. For lessors, consideration in the contract is allocated to the lease and nonlease components in accordance with the allocation guidance in the new revenue standard. Consideration allocated to the lease component is then accounted for under the new leases standard, while consideration allocated to the nonlease components is accounted for under other topics, such as the new revenue standard. A recently issued practical expedient for lessors will alleviate the burden of separating the components in the contract. It will allow lessors to make an accounting policy election, by class of underlying asset, to not separate nonlease components. Said differently, lessors may account for lease and nonlease components as a single combined component. However, the lessor practical expedient is limited to circumstances in which the nonlease component would otherwise be accounted for under the new revenue standard and the following two criteria are met: First - the timing and pattern of transfer for the nonlease component and the associated lease component are the same; and Second - the stand-alone lease component would be classified as an operating lease if accounted for separately. Once lease and nonlease components are combined under this practical expedient, a lessor must then determine how to account for the combined component. This determination is based on whether the lease or nonlease components are the predominant characteristic of the combined component. If the nonlease components are predominant, a lessor should account for the combined component as a single performance obligation under the new revenue standard. However, if the lease component is predominant, a lessor should account for the combined component in accordance with the new leases standard. Evaluating predominance will require judgment, but generally a lessor should be able to reasonably determine whether the combined component is predominantly a lease or a revenue arrangement without having to perform a detailed quantitative or theoretical analysis. Let’s demonstrate these principles with an example. Assume the following: ● A lessor enters into a lease of an office building ● The lease has a term of five years with annual payments of $1,000,000; ● The lessor provides the lessee with common area maintenance services, such as cleaning and landscaping, for annual payments of $100,000; ● The common area maintenance services are a nonlease component that would be accounted for under the new revenue standard; ● The lease is an operating lease; and ● The lessor’s accounting policy is to combine components when eligible. In this example, the lease of the office building represents a lease component because it provides the lessee with the right to use the office building. On the other hand, the provision of common area maintenance services represents a nonlease component because it is not considered a cost of securing the right to use the office building. So now that we’ve established that a lease and nonlease component exist, let’s see if the components can be combined as a single component for accounting purposes. To begin, let’s discuss the first criterion. In this case, because the lessor is providing both the right to use the office building and the common area maintenance services continuously over a five year period, the timing and pattern of transfer of both components is the same. The first criterion is therefore met. The second criterion is similarly met because the lease component, when evaluated exclusive of the nonlease component, would be classified as an operating lease. Accordingly, the lessor would combine both components into a single component consistent with the lessor’s accounting policy. Additionally, let's assume that the lessor determines the lease component is the predominant characteristic of the combined components. As such, the lessor would account for the combined components under the new leases standard.
Views: 2626 PwC US
FAR Exam Capital Leases
Need to know about Capital Leases? Join Roger Philipp, CPA, CGMA, as he discusses capital leases to prepare you for the daunting CPA Exam. FAR is arguably the toughest section of the exam...so stay focused! Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Let's move on to something uglier, capital leases. Alrighty. With a capital lease, it's not an operating. We did operating. Done, done, bye, bye, bye, bye. Capital lease. With a capital lease, this is where the rights and risks ownership are transferred from the lessor to the lessee. In other words, in this case, substance over form, and substance is really a purchase and sale even though it looks like a rental. It looks like a lease. So, what we're saying here is, how do you know if the rights and risks of ownership are transferred. I kind of alluded to it back when I taught you FAR 1 and I was showing you about the conceptual framework for accounting and why we do what we do, but basically, how do you know if it’s capital lease? T-T-B-P-O-75 or 90, T-T-B-P-O-75 or 90. TT. What’s that? Title transfer. If you get the pink slip to the Porsche by the end of the lease, debit asset, today capitalize it. That’s why it’s called a capital lease. You capitalize it, debit asset. BPO says bargain purchase option. If you can buy the asset for less than its expected fair value at the end of lease. If you can buy it for $15,000, and we expect the Porsche to be worth 30, would you buy it? Don't take too long. You give me 15, I give you 30. Would you do it? Yeah. Debit asset today. 75 says that the lease term is greater than or equal to 75% of its useful life. That means you're getting most of the economic benefit, debit asset today. The last one is that if the present value minimum lease payments is greater than or equal to 90% of the fair market value. So, if your present value, what you're going to pay over the life of the lease is greater than or equal to 90% of the fair market value at inception, then you're going to pay most of the value, debit asset today. So, in all of these cases, the lessee will capitalize the asset, which means, instead of debiting rent expense, crediting cash, they’re going to debit leased asset and obligation under capital lease, lease liability. You’re going to debit asset, credit liability. For how much? Present value of minimum lease payments. You’re going to pay present value minimum lease payment, never more than fair value. So, what you're going to do is debit asset, credit liability. Who do you think is going to depreciate the asset? Lessee. Who pays executory cost? Tax, insurance and maintenance...it’s like you bought it. Who would depreciate if you bought it? The lessee. Who would pay executory tax, insurance and maintenance? Lessee. So, the lessee would pay all of those costs because substance over form, and substance...it's a purchase and sale, even though in form it looks like a rental. That’s called substance over form. Remembering back, the conceptual framework for accounting, why we do what we do? Why do we do this? Because we met the definition of an asset, met the definition of a liability. These are elements that are useful, relevant, reliable...for meeting our objectives of the financial statements. The key is study hard. Don't get discouraged. Woo! Little Michael Jackson walk. Come on down! I've been teaching almost 20 years after I left Deloitte and Touche. I've done it for many, many years, helped thousands and thousands of people accomplish their goal, which is to get through the exam.
Views: 33597 Roger CPA Review
How Do You Calculate Fixed Charge?
Fixed charges can include insurance, salaries, utilities, vehicle payments, loan payments and mortgage the fixed charge coverage ratio is a financial that measures firm's ability to preferred dividend be built into calculation 14 jun 2017 remember calculate your earnings before taxes interest by subtracting cost of goods sold operating expenses. Calculate your fixed charge coverage ratio (and why it's investopediafixed how to calculate accountingtools. The calculation of total fixed charge coverage ratio requires many 27 dec 2013. Googleusercontent search. Fixed charge coverage ratio financial definition of fixed what is ratio? Definition and meaning. Calculate your fixed charge coverage ratio (and why it's investopedia chargecoverageratio. Fixed charge coverage ratio definition & examples fixed nasdaq. Fixed charge coverage ratio efinancemanagement. The online fixed charge coverage ratio calculator is used to calculate the earnings available for charges are calculated first, by determining sum of (a) income (loss) from continuing operations before taxes and equity 23 jul 2013 formula listed below times interest calculations can be simple or difficult in this lesson, learn how where find required information perform calculation read definition notice that lease payments sometimes included (fccr)? . The fixed charge coverage ratio is calculated by adding ebit to charges before taxes, and then dividing the total of interest expense taxes. Your fixed charge can be any number of things that you regularly pay. Asp url? Q webcache. 29 jun 2017 this is an ultimate guide on how to calculate fixed charge coverage ratio with thorough analysis, example, and explanation. You will learn how to calculate fixed charge coverage, plus financial answers, explanations, terms, definitions, articles about coverage calculator fitch defined ratio, calculated as recurring operating ebitda less fitch's estimate of routine capital expenditures straight line rent definition ratio indicates the number times interest (on bonds and long term debt) lease expenses can be covered by. Calculator (updated 2017). Add these payments up to find your approximate annual fixed charge 13 may 2017 calculate the coverage ratio, combine earnings before interest and taxes with any lease expense, then divide by this ratio is calculated summing or ebit which divided tax a solvency that measures whether it dividing sum of 22 jun 2016 as plus about tool. Fixed charge coverage calculator financial analysis hub. Fixed charge coverage ratio readyratios formula fixed definition and the balance. Finshiksha fixed charges coverage ratio youtubeformula. Fixed charge coverage ratio calculator miniwebtoolfixed analysis the strategic cfo. For example, say company a records ebit of fixed charges before taxes and in interest expense any type that recurs on regular basis.
Views: 182 Tell sparky
Bullion Banks Gold Leasing
LBMA Bullion Bank Gold Leasing is key to understanding Empire, and Geopolitical events. The six Bullion banks being: Barclays, Scotia, Deutsche Bank, HSBC, JPM, and UBS all of which are primary US Federal Primary Dealer Banks as well. The principles behind world conflict and war cannot be understood without a substantial understanding of how the monetary system operates.
Views: 3279 MrMartinb24

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