This document provides an overview and summary of key topics related to lessee and lessor accounting for leases. It discusses the classification of leases as capital or operating, accounting and reporting for both types of leases, and issues such as non-level rents, leasehold improvements, tenant incentives, and sale-leaseback transactions. It also provides an overview of the audit approach for testing operating and capital leases. Finally, it discusses current developments from the FASB to require lessees to recognize assets and liabilities for operating leases on the balance sheet.
This document provides an overview and summary of key topics related to lessee and lessor accounting for leases. It discusses the classification of leases as capital or operating, accounting and reporting for both types of leases, and issues such as non-level rents, leasehold improvements, tenant incentives, and sale-leaseback transactions. It also provides an overview of the audit approach to leases and current developments regarding the FASB's proposed changes to the lease accounting standards that would eliminate off-balance sheet treatment of operating leases.
The document provides an overview of accounting for leases, including:
1) Evaluating if an arrangement contains a lease and the definition of a lease.
2) Classifying leases as either operating or capital leases based on certain criteria.
3) Accounting for operating leases, such as recognizing rent expense straight-line over the lease term and treatment of incentives and modifications.
4) Required disclosures for operating leases relating to rent expense, future minimum payments, and sublease rentals.
The document discusses the differences between operating leases and finance/capital leases. It provides criteria for classifying leases under IFRS and US GAAP. Finance/capital leases transfer substantially all risks and rewards of ownership to the lessee. They are accounted for similarly to loans where the lessee capitalizes the asset and liability. Operating leases do not transfer substantially all risks and rewards and are accounted for differently than finance leases. The document also provides an example comparing accounting for a finance lease under IFRS versus US GAAP.
IAS 17 provides guidance on classifying and accounting for leases. It distinguishes between finance and operating leases and sets out the required accounting treatment for each type from the perspectives of lessees and lessors. Key aspects covered include criteria for lease classification, accounting for lease payments and incentives, sale and leaseback transactions, and disclosure requirements.
The document provides an overview of IAS 17 which prescribes accounting policies and disclosures for leases. Some key points:
- IAS 17 distinguishes between a finance lease and an operating lease based on whether substantially all risks and rewards of ownership are transferred.
- For a finance lease, the lessee recognizes an asset and liability at an amount equal to the lower of fair value or present value of minimum lease payments. The asset is depreciated over its useful life.
- For an operating lease, the lessee recognizes lease payments as an expense on a straight-line basis over the lease term.
- A finance lease results in the recognition of an interest expense, while an operating lease
The document discusses accounting for leases according to MFRS 117. It defines a lease as an agreement where a lessor conveys to a lessee the right to use an asset for an agreed period of time. Leases are classified as either operating leases or finance leases based on whether substantially all risks and rewards of ownership are transferred. For operating leases, the lessee records rental expenses and the lessor records rental income, while finance leases result in the lessee recording the leased asset and liability. The document provides examples of accounting entries for both types of leases for lessees and lessors.
The amortization schedule shows the recovery of the lessor's investment in the leased asset over the lease term through both the lease payments and interest revenue.
LO 5 Describe the lessor’s accounting for direct-financing leases.
31
Accounting by the Lessor
Direct-Financing Method (Lessor)
Journal Entries:
1/1/07 Asset (cost) 245,000
Receivable from lessee 245,000
1/1/07 Cash 46,000
Interest revenue 19,900
Receivable from lessee 26,100
No manufacturer's profit or loss is recognized.
Interest method provides a constant periodic rate of
This document provides an overview and summary of key topics related to lessee and lessor accounting for leases. It discusses the classification of leases as capital or operating, accounting and reporting for both types of leases, and issues such as non-level rents, leasehold improvements, tenant incentives, and sale-leaseback transactions. It also provides an overview of the audit approach to leases and current developments regarding the FASB's proposed changes to the lease accounting standards that would eliminate off-balance sheet treatment of operating leases.
The document provides an overview of accounting for leases, including:
1) Evaluating if an arrangement contains a lease and the definition of a lease.
2) Classifying leases as either operating or capital leases based on certain criteria.
3) Accounting for operating leases, such as recognizing rent expense straight-line over the lease term and treatment of incentives and modifications.
4) Required disclosures for operating leases relating to rent expense, future minimum payments, and sublease rentals.
The document discusses the differences between operating leases and finance/capital leases. It provides criteria for classifying leases under IFRS and US GAAP. Finance/capital leases transfer substantially all risks and rewards of ownership to the lessee. They are accounted for similarly to loans where the lessee capitalizes the asset and liability. Operating leases do not transfer substantially all risks and rewards and are accounted for differently than finance leases. The document also provides an example comparing accounting for a finance lease under IFRS versus US GAAP.
IAS 17 provides guidance on classifying and accounting for leases. It distinguishes between finance and operating leases and sets out the required accounting treatment for each type from the perspectives of lessees and lessors. Key aspects covered include criteria for lease classification, accounting for lease payments and incentives, sale and leaseback transactions, and disclosure requirements.
The document provides an overview of IAS 17 which prescribes accounting policies and disclosures for leases. Some key points:
- IAS 17 distinguishes between a finance lease and an operating lease based on whether substantially all risks and rewards of ownership are transferred.
- For a finance lease, the lessee recognizes an asset and liability at an amount equal to the lower of fair value or present value of minimum lease payments. The asset is depreciated over its useful life.
- For an operating lease, the lessee recognizes lease payments as an expense on a straight-line basis over the lease term.
- A finance lease results in the recognition of an interest expense, while an operating lease
The document discusses accounting for leases according to MFRS 117. It defines a lease as an agreement where a lessor conveys to a lessee the right to use an asset for an agreed period of time. Leases are classified as either operating leases or finance leases based on whether substantially all risks and rewards of ownership are transferred. For operating leases, the lessee records rental expenses and the lessor records rental income, while finance leases result in the lessee recording the leased asset and liability. The document provides examples of accounting entries for both types of leases for lessees and lessors.
The amortization schedule shows the recovery of the lessor's investment in the leased asset over the lease term through both the lease payments and interest revenue.
LO 5 Describe the lessor’s accounting for direct-financing leases.
31
Accounting by the Lessor
Direct-Financing Method (Lessor)
Journal Entries:
1/1/07 Asset (cost) 245,000
Receivable from lessee 245,000
1/1/07 Cash 46,000
Interest revenue 19,900
Receivable from lessee 26,100
No manufacturer's profit or loss is recognized.
Interest method provides a constant periodic rate of
The document discusses accounting for leases according to IAS 17. It defines a lease as an agreement where a lessor conveys to a lessee the right to use an asset for an agreed period of time in return for payments. Leases are classified as either finance leases or operating leases. For finance leases, substantially all risks and rewards of ownership are transferred, while operating leases do not transfer substantially all risks and rewards. The document provides examples of accounting entries for lessees and lessors for both finance and operating leases.
IAS 17 provides guidance on accounting for leases. Key aspects include classifying leases as either finance or operating based on transfer of risks and rewards of ownership. Lessees account for finance and operating leases differently, with finance leases requiring recognition of leased assets and liabilities on the balance sheet. Lessors also account for finance and operating leases differently, with finance leases requiring recognition of a net investment receivable that is amortized over the lease term to achieve a constant rate of return. Sale and leaseback transactions are also addressed.
The document defines key terms related to leases, including lessor, lessee, operating lease, and finance lease. It distinguishes between operating and finance leases and provides criteria for each. It also discusses minimum lease payments, contingent rent, fair value, economic life, and sale-leaseback transactions. Recording of leases is discussed for both lessees and lessors depending on if the lease is an operating or finance lease.
IAS 17 provides guidance on accounting for leases. It distinguishes between finance and operating leases based on whether substantially all risks and rewards of ownership are transferred. Lessees account for finance leases by recognizing the asset and liability at fair value, while operating leases are expensed. Lessors recognize finance leases as a receivable and operating leases as ongoing income. Both are subject to extensive disclosure requirements regarding lease terms, commitments, and accounting policies.
The document discusses accounting for leases according to MFRS 117. It defines key terms such as operating lease, finance lease, minimum lease payments. For operating leases, the lessee recognizes rental expenses on a straight-line basis and does not record the leased asset on its balance sheet. The lessor continues to recognize the leased asset and recognizes rental income also on a straight-line basis. For finance leases, the lessee recognizes the leased asset and liability on its balance sheet at the lower of fair value or present value of minimum lease payments.
A lease is a contractual agreement between a lessor, who owns an asset, and a lessee, who uses the asset. There are two main types of leases from an accounting perspective: operating leases and capital leases. For operating leases, the asset is not recorded on the lessee's balance sheet, while lease payments are expensed over time. For capital leases, the asset and liability are recorded on the lessee's balance sheet similar to a purchased asset. Leases allow companies to acquire assets without large upfront cash outlays and provide off-balance sheet financing advantages.
The document provides an outline for a conference presentation on lease accounting. It covers the definition of a lease, the lease versus buy decision, types of leases including operating, capital/finance, and sales-type leases. It discusses lease classification criteria and provides examples of accounting entries and financial statement presentation for operating and direct finance/capital leases. The presentation aims to explain the basics of lease accounting for both lessors and lessees.
This document discusses different types of leases from the perspectives of both lessees and lessors. It defines key lease terms and outlines the accounting treatment for capital, operating, direct financing, and sales-type leases. For capital leases by lessees, assets and liabilities are recorded on the balance sheet. For operating leases, rent is expensed over the lease term. For direct financing and sales-type leases by lessors, receivables are recorded along with cost of goods sold or unearned interest revenue depending on the fair value of the leased asset.
Leasing is a contract between an owner (lessor) and lessee for the hiring of an asset. There are two main types of leases: operating leases and finance leases. An operating lease lasts for a period less than the asset's useful life, while a finance lease lasts the asset's full useful life and transfers substantially all risks and rewards of ownership to the lessee. When evaluating a lease, firms should compare the NPV of leasing versus purchasing an asset using the after-tax cost of debt as the discount rate. Common lease types include capital/financial leases, direct financing leases, and sale-leaseback agreements. Finance leases require lessees to capitalize the leased asset and
1. This document provides training on financial services management for professional sales representatives seeking to advance their careers into management.
2. It covers the benefits of leasing, who is a good candidate for leasing, basic leasing terminology, and how to calculate residual values.
3. The objectives are to understand the benefits of leasing, determine good leasing candidates, learn terminology, and calculate residuals.
The document discusses accounting for leases according to MFRS 117. It defines a lease and classifies leases as either operating leases or finance leases. For operating leases, the lessee recognizes rental expenses over the lease term and the lessor recognizes rental revenue over the lease term. For finance leases, the lessee recognizes an asset and liability equal to the present value of minimum lease payments.
This document discusses lease accounting and the different types of leases. It defines a lease as an agreement where the lessor conveys the right to use an asset to the lessee in exchange for rent payments. The document outlines Accounting Standard 19, which governs lease accounting, and describes the parties involved in a lease contract. It then distinguishes between the two main types of leases: operating leases, which are usually short-term cancellable leases, and finance leases, which transfer substantially all the risks and rewards of asset ownership to the lessee. The document concludes by noting some of the advantages and disadvantages of leasing for both lessees and lessors.
Leasing involves the periodic payment of rentals in exchange for the right to use an asset for a fixed period of time. There are advantages to both the lessor and lessee. For the lessor, it provides a stable business and opportunities to sell spare parts or the asset after the lease term. For the lessee, leasing allows for efficient use of funds without capital investment and a potentially cheaper source than outright purchase. Both parties must consider factors like taxes, costs of capital, and break-even rental rates to determine if a lease is financially advantageous.
This document discusses lease financing and lease analysis. It covers the key parties in a lease transaction, the primary lease types, how leases are treated for tax purposes, and how leasing affects a firm's balance sheet. It also provides an example comparing the after-tax costs of owning vs leasing equipment for a firm, analyzing it from both the lessee and lessor perspectives. Key factors in lease analysis like residual value uncertainty and cancellation clauses are also discussed.
The document discusses the concept of hire purchase, which is a mode of financing where goods are leased on hire with the option for the lessee to purchase them by paying installments. Key points include: hire purchase involves periodic installment payments, immediate possession of goods by the buyer but ownership remaining with the seller until final payment; features like being based on a written agreement and ownership transferring after final payment; and rights and obligations of both the hirer and hire vendor. Differences between leasing and hire purchase are also outlined.
This document discusses different types of lease financing. It describes financial leasing, operating leasing, sale and leaseback leasing, direct leasing, and leveraged leasing. Financial leasing involves the lessor retaining title to the asset, transferring risk and reward to the lessee, and having non-cancelable leases that cover most of the asset's economic life. Operating leasing involves shorter terms than the asset's life, maintenance by the lessor, and cancelability by the lessee. Sale and leaseback leasing involves selling an asset to a lessor who then leases it back to the original owner.
VAS 06 provides guidance on accounting for leases. It defines key terms like financial lease, operating lease, minimum lease payments, and economic life. Leases are classified as either financial or operating based on the degree of risk and rewards transferred from the lessor to the lessee. A financial lease transfers most risks and rewards of ownership, while an operating lease does not. The standard provides examples of provisions that typically result in a lease being classified as financial.
This document provides an introduction to corporate finance leasing. It begins with learning objectives which are to understand the basic characteristics and accounting treatment of operating and financial leases, as well as how to evaluate lease decisions. Key terms like operating lease, financial lease, and sale-leaseback agreement are introduced. The major types of leasing arrangements - operating leases, financial leases, conditional sales agreements, and sale-leaseback agreements - are then defined and distinguished. The document concludes by explaining how to evaluate the decision to lease versus buy by comparing the cash flow implications of each option.
1. Leasing is a way for businesses to finance plant, property, and equipment through a leasing agreement where three parties are involved: the lessor who provides financing, the lessee who receives the financing, and the seller of the goods.
2. Under a leasing agreement, the lessee first contacts the lessor to request financing for equipment. If approved, the lessee then contacts the seller while the lessor pays the seller and the equipment is transferred to the lessee. The lessee makes fixed monthly payments covering principal and interest to the lessor.
3. There are different types of leasing including sale-leaseback, financial/capital leases, and vendor programs. Financial le
Colombia: Amenazan de muerte a sindicalistas y trabajadores de NestléCrónicas del despojo
Nestlé tiene un historial de 13 sindicalistas de SINALTRAINAL asesinados en el país. Hace más de seis meses que grupos criminales paramilitares bajo diversas denominaciones vienen amenazando de muerte a los dirigentes sindicales de Nestlé en Bugalagrande, instándoles a que abandonen la ciudad.
The document discusses accounting for leases according to IAS 17. It defines a lease as an agreement where a lessor conveys to a lessee the right to use an asset for an agreed period of time in return for payments. Leases are classified as either finance leases or operating leases. For finance leases, substantially all risks and rewards of ownership are transferred, while operating leases do not transfer substantially all risks and rewards. The document provides examples of accounting entries for lessees and lessors for both finance and operating leases.
IAS 17 provides guidance on accounting for leases. Key aspects include classifying leases as either finance or operating based on transfer of risks and rewards of ownership. Lessees account for finance and operating leases differently, with finance leases requiring recognition of leased assets and liabilities on the balance sheet. Lessors also account for finance and operating leases differently, with finance leases requiring recognition of a net investment receivable that is amortized over the lease term to achieve a constant rate of return. Sale and leaseback transactions are also addressed.
The document defines key terms related to leases, including lessor, lessee, operating lease, and finance lease. It distinguishes between operating and finance leases and provides criteria for each. It also discusses minimum lease payments, contingent rent, fair value, economic life, and sale-leaseback transactions. Recording of leases is discussed for both lessees and lessors depending on if the lease is an operating or finance lease.
IAS 17 provides guidance on accounting for leases. It distinguishes between finance and operating leases based on whether substantially all risks and rewards of ownership are transferred. Lessees account for finance leases by recognizing the asset and liability at fair value, while operating leases are expensed. Lessors recognize finance leases as a receivable and operating leases as ongoing income. Both are subject to extensive disclosure requirements regarding lease terms, commitments, and accounting policies.
The document discusses accounting for leases according to MFRS 117. It defines key terms such as operating lease, finance lease, minimum lease payments. For operating leases, the lessee recognizes rental expenses on a straight-line basis and does not record the leased asset on its balance sheet. The lessor continues to recognize the leased asset and recognizes rental income also on a straight-line basis. For finance leases, the lessee recognizes the leased asset and liability on its balance sheet at the lower of fair value or present value of minimum lease payments.
A lease is a contractual agreement between a lessor, who owns an asset, and a lessee, who uses the asset. There are two main types of leases from an accounting perspective: operating leases and capital leases. For operating leases, the asset is not recorded on the lessee's balance sheet, while lease payments are expensed over time. For capital leases, the asset and liability are recorded on the lessee's balance sheet similar to a purchased asset. Leases allow companies to acquire assets without large upfront cash outlays and provide off-balance sheet financing advantages.
The document provides an outline for a conference presentation on lease accounting. It covers the definition of a lease, the lease versus buy decision, types of leases including operating, capital/finance, and sales-type leases. It discusses lease classification criteria and provides examples of accounting entries and financial statement presentation for operating and direct finance/capital leases. The presentation aims to explain the basics of lease accounting for both lessors and lessees.
This document discusses different types of leases from the perspectives of both lessees and lessors. It defines key lease terms and outlines the accounting treatment for capital, operating, direct financing, and sales-type leases. For capital leases by lessees, assets and liabilities are recorded on the balance sheet. For operating leases, rent is expensed over the lease term. For direct financing and sales-type leases by lessors, receivables are recorded along with cost of goods sold or unearned interest revenue depending on the fair value of the leased asset.
Leasing is a contract between an owner (lessor) and lessee for the hiring of an asset. There are two main types of leases: operating leases and finance leases. An operating lease lasts for a period less than the asset's useful life, while a finance lease lasts the asset's full useful life and transfers substantially all risks and rewards of ownership to the lessee. When evaluating a lease, firms should compare the NPV of leasing versus purchasing an asset using the after-tax cost of debt as the discount rate. Common lease types include capital/financial leases, direct financing leases, and sale-leaseback agreements. Finance leases require lessees to capitalize the leased asset and
1. This document provides training on financial services management for professional sales representatives seeking to advance their careers into management.
2. It covers the benefits of leasing, who is a good candidate for leasing, basic leasing terminology, and how to calculate residual values.
3. The objectives are to understand the benefits of leasing, determine good leasing candidates, learn terminology, and calculate residuals.
The document discusses accounting for leases according to MFRS 117. It defines a lease and classifies leases as either operating leases or finance leases. For operating leases, the lessee recognizes rental expenses over the lease term and the lessor recognizes rental revenue over the lease term. For finance leases, the lessee recognizes an asset and liability equal to the present value of minimum lease payments.
This document discusses lease accounting and the different types of leases. It defines a lease as an agreement where the lessor conveys the right to use an asset to the lessee in exchange for rent payments. The document outlines Accounting Standard 19, which governs lease accounting, and describes the parties involved in a lease contract. It then distinguishes between the two main types of leases: operating leases, which are usually short-term cancellable leases, and finance leases, which transfer substantially all the risks and rewards of asset ownership to the lessee. The document concludes by noting some of the advantages and disadvantages of leasing for both lessees and lessors.
Leasing involves the periodic payment of rentals in exchange for the right to use an asset for a fixed period of time. There are advantages to both the lessor and lessee. For the lessor, it provides a stable business and opportunities to sell spare parts or the asset after the lease term. For the lessee, leasing allows for efficient use of funds without capital investment and a potentially cheaper source than outright purchase. Both parties must consider factors like taxes, costs of capital, and break-even rental rates to determine if a lease is financially advantageous.
This document discusses lease financing and lease analysis. It covers the key parties in a lease transaction, the primary lease types, how leases are treated for tax purposes, and how leasing affects a firm's balance sheet. It also provides an example comparing the after-tax costs of owning vs leasing equipment for a firm, analyzing it from both the lessee and lessor perspectives. Key factors in lease analysis like residual value uncertainty and cancellation clauses are also discussed.
The document discusses the concept of hire purchase, which is a mode of financing where goods are leased on hire with the option for the lessee to purchase them by paying installments. Key points include: hire purchase involves periodic installment payments, immediate possession of goods by the buyer but ownership remaining with the seller until final payment; features like being based on a written agreement and ownership transferring after final payment; and rights and obligations of both the hirer and hire vendor. Differences between leasing and hire purchase are also outlined.
This document discusses different types of lease financing. It describes financial leasing, operating leasing, sale and leaseback leasing, direct leasing, and leveraged leasing. Financial leasing involves the lessor retaining title to the asset, transferring risk and reward to the lessee, and having non-cancelable leases that cover most of the asset's economic life. Operating leasing involves shorter terms than the asset's life, maintenance by the lessor, and cancelability by the lessee. Sale and leaseback leasing involves selling an asset to a lessor who then leases it back to the original owner.
VAS 06 provides guidance on accounting for leases. It defines key terms like financial lease, operating lease, minimum lease payments, and economic life. Leases are classified as either financial or operating based on the degree of risk and rewards transferred from the lessor to the lessee. A financial lease transfers most risks and rewards of ownership, while an operating lease does not. The standard provides examples of provisions that typically result in a lease being classified as financial.
This document provides an introduction to corporate finance leasing. It begins with learning objectives which are to understand the basic characteristics and accounting treatment of operating and financial leases, as well as how to evaluate lease decisions. Key terms like operating lease, financial lease, and sale-leaseback agreement are introduced. The major types of leasing arrangements - operating leases, financial leases, conditional sales agreements, and sale-leaseback agreements - are then defined and distinguished. The document concludes by explaining how to evaluate the decision to lease versus buy by comparing the cash flow implications of each option.
1. Leasing is a way for businesses to finance plant, property, and equipment through a leasing agreement where three parties are involved: the lessor who provides financing, the lessee who receives the financing, and the seller of the goods.
2. Under a leasing agreement, the lessee first contacts the lessor to request financing for equipment. If approved, the lessee then contacts the seller while the lessor pays the seller and the equipment is transferred to the lessee. The lessee makes fixed monthly payments covering principal and interest to the lessor.
3. There are different types of leasing including sale-leaseback, financial/capital leases, and vendor programs. Financial le
Colombia: Amenazan de muerte a sindicalistas y trabajadores de NestléCrónicas del despojo
Nestlé tiene un historial de 13 sindicalistas de SINALTRAINAL asesinados en el país. Hace más de seis meses que grupos criminales paramilitares bajo diversas denominaciones vienen amenazando de muerte a los dirigentes sindicales de Nestlé en Bugalagrande, instándoles a que abandonen la ciudad.
El documento trata sobre motores eléctricos. Explica que los motores se pueden clasificar como máquinas dinámicas y que los núcleos de las máquinas eléctricas están hechos de acero dulce y son laminados para evitar corrientes de Foucault. También describe diferentes conexiones de motores trifásicos asíncronos, incluyendo delta y estrella.
The Holborn Group is a rapidly expanding financial services group based in Dubai, UAE, with a vision to be the top choice for financial services in the region. They provide investment advice, wealth management, insurance, and other services to individuals and corporations through three divisions: Holborn Assets focuses on expat individuals, Holborn Employee Benefits works with corporations on benefits packages, and Holborn Management Services offers structures for asset protection and taxation advice. The Holborn Group aims to build long-term client relationships through independent, high-quality advice and service.
The Indian Wells Masters will see Rafael Nadal attempt to win his 22nd Masters title, Novak Djokovic compete as the world number one, and Andy Murray try to move up to the world number two ranking spot. Juan Martin Del Potro and Jo-Wilfried Tsonga are also contenders at the tournament.
MoE St Vincent and Grenadines session outlinedean dundas
This two-day training session outline provides an introduction to the Notesmaster platform for educators in St. Vincent and the Grenadines. Session 1 focuses on familiarizing participants with the platform and creating classes and resources. Session 2 helps participants learn how to create quizzes and enrich resources by adding third-party content and embedding resources. Ongoing support is offered to help participants continue creating and sharing resources for their school communities.
Here are the main objectives of the Ecuadorian Curriculum Reform of 2012 according to the document:
1. Strengthen the humanistic and transformative approach in education to promote values like solidarity, respect for diversity and critical thinking.
2. Update the curriculum based on accumulated experiences in its application, from other countries and according to the needs of students.
3. Promote an intercultural, inclusive education that values Ecuador's cultural and linguistic diversity.
4. Protect students from the risks of media influence and promote healthy habits of recreation for students.
5. Improve the quality of education with a focus on developing competencies for life and work.
6. Guide evaluation to complement learning and help teachers
Gestión de calidad y Artículos 14, 22, 23 Y 24 de la ley 115 de 1994thefuckingmen21
Este documento presenta un resumen de varios artículos de la Ley 155 de 1994 en Colombia relacionados con la gestión de calidad y la educación. Explica conceptos como gestión de calidad, evolución histórica, objetivos de la educación básica y secundaria según la ley, áreas obligatorias de estudio, y educación religiosa. El documento busca informar sobre estos temas legales y educativos.
We are a prominent Manufacturer and Importer of products such as Steel Security Doors and Stainless Steel Doors, etc. These products are extensively used and appreciated for their optimum quality and long service life.
The document summarizes the Hawaii Diet program. The Hawaii Diet is a whole person program that focuses on food, diet, exercise, stress reduction, and Hawaiian concepts to maximize health. It emphasizes eating whole, unprocessed foods like fruits and vegetables without calorie counting. The diet integrates modern nutrition science with ancient Hawaiian wisdom and traditional diets from healthy cultures. It allows flexibility and provides easy, delicious recipes. The program aims to help people lose weight, increase energy, and improve health and well-being.
O documento discute a cidade de Jerusalém e sua história como um símbolo de paz que atualmente está dividida e em conflito. Faz referência a passagens bíblicas que descrevem Jerusalém como uma fortaleza espiritual que está sob ataque de ideias contrárias ao conhecimento de Deus. Também menciona a possibilidade de uma nova mudança relacionada ao sincretismo religioso e ao evangelho em terras estrangeiras.
The document is a parts catalog for a John Deere 7760 cotton picker. It contains information on engine parts, fuel and air systems, electrical components, power train, steering, brakes, hydraulics, wheels, rear axles, sheet metal, the operator station, air conditioning, the picking unit lift, and picking unit cabinets. Section indexes are provided to navigate the different systems and components covered.
The document discusses accounting for leases. It defines key lease terms and outlines the accounting treatment for leases from the perspective of both lessees and lessors. For lessees, a lease that meets capitalization criteria must be recorded as a capital lease, requiring the recognition of an asset and liability. For lessors, leases are classified as direct financing, sales-type, or operating depending on whether they meet capitalization criteria. Direct financing and sales-type leases require recording a receivable, while operating leases use the operating method. Several example problems demonstrate calculating present values and journal entries for lessees and lessors.
This document discusses leasing, which allows one party to use an asset owned by another party. There are two main types of leases: operating/service leases and financial/net leases. Operating leases provide maintenance services while financial leases do not. Leasing offers advantages over ownership like facilitating asset acquisition and improving financial position, but parties must consider tax and ownership implications.
This document summarizes key aspects of Accounting Standard 19 (AS-19) related to accounting for leases in India. It discusses the differences between finance and operating leases, and the accounting treatment for lessors and lessees under each. It also covers sale and leaseback transactions, tax implications, and disclosure requirements as per AS-19.
This document defines leases and outlines the key parties and types of leases. It discusses the main reasons companies utilize leasing, such as lower monthly payments and protection against asset obsolescence. However, leasing is not always the best financial option, as it can be used to avoid capital expenditure controls or make a company's financial statements appear stronger than they are through off-balance sheet financing. Regulatory bodies have provided guidelines on distinguishing between capital/finance leases, which must be recognized as assets and liabilities, and operating leases.
Leasing & Hire purchase, factoring & forfeiting and venture capitalRohit Kumar
This document discusses accounting standards for leases and provides examples of accounting entries for capital and operating leases. It defines key lease terms and outlines the criteria for classifying a lease as a capital lease from the lessee's perspective. A capital lease exists if ownership transfers to the lessee by the end of the lease term, there is a bargain purchase option, the lease term covers at least 75% of the asset's useful life, or the present value of lease payments equals or exceeds 90% of the asset's fair value. The document provides an example of a capital lease and the corresponding journal entries to record the transaction from the lessee's perspective over the lease term.
Finvision impact series 1 - ed leases - lessee accountingFinvision
This document summarizes a revised exposure draft on lease accounting from the IASB and FASB. The draft proposes changes to improve transparency and comparability around lease accounting. For leases over 12 months, entities will recognize assets and liabilities for the rights and obligations conveyed by the lease. It outlines a "right of use" model requiring lessees to recognize assets and liabilities for the right to use leased assets and future lease payments. It also discusses classification of leases, measurement of assets and liabilities, subsequent accounting, disclosure requirements, and the potential impact on businesses.
This document provides an overview of leasing and lease financing. It defines what a lease is and discusses the key aspects of lease agreements such as rental payments, maintenance clauses, cancellation provisions, renewal and purchase options.
It distinguishes between operating leases and finance/capital leases. Operating leases are typically short-term while finance leases are longer-term and transfer most of the risks and rewards of ownership to the lessee.
The document also covers the different methods of lease financing including sales-leasebacks, direct leases, and leveraged leases. It discusses the advantages and disadvantages of lease financing for both lessees and lessors. Finally, it compares long-term debt versus leasing
This document provides an overview of leasing, including definitions, characteristics, types of leases, and the regulatory framework. It defines a lease as an agreement where the lessor conveys the right to use an asset to the lessee in return for rent. There are two main types of leases: financial leases, where the lessee assumes most of the risks and benefits of ownership, and operating leases, which are usually shorter term. The document also outlines the legal rights and obligations of lessors and lessees under contract law and discusses key components of lease agreements.
IND AS 116 establishes new principles for the recognition, measurement, presentation and disclosure of leases. It introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. The standard also contains revised requirements for lessor accounting. The key changes introduced by IND AS 116 include bringing most operating leases onto a lessee's statement of financial position in a similar way to finance leases, enhancing the required disclosures to help users better understand the amount, timing and uncertainty of cash flows arising from leases, and aligning lease accounting according to the underlying right of use asset.
This document summarizes the key aspects of Accounting Standard (AS) 19 regarding the accounting treatment of leases. It defines leases and the different types of leases - operating and finance leases. For finance leases, it outlines that the asset and liability should be recorded on the lessee's balance sheet. For operating leases, the lease payments should be recorded as expenses. It also discusses the accounting treatment for sale and leaseback transactions, required disclosures for lessees and lessors, and the differences between AS 19 and IND AS 17 regarding leases.
This document discusses accounting for leases. It defines a lease and classifies leases as either finance leases or operating leases. Finance leases transfer substantially all risks and rewards of asset ownership to the lessee, while operating leases do not. The document outlines criteria for classifying a lease as a finance lease and explains accounting for finance leases by both lessees and lessors. Specifically, for finance leases lessees recognize the leased asset and liability while lessors recognize a receivable, and both are initially measured based on lease payments. For operating leases, both lessees and lessors recognize lease payments as expense or income over the lease term.
The document discusses leases and lease accounting. It defines operating and capital leases and outlines the key differences. It explains how to classify and account for leases, discussing the relevant accounting entries for lessees and lessors. Disclosure requirements for leases are also covered. The document analyzes the impact of operating versus capital lease treatment and how to convert operating leases to capital leases for financial statement analysis purposes.
Term loans are commonly used by small businesses to purchase equipment, buildings, or other fixed assets needed to operate. They typically have maturities of 1-5 years and require collateral. Interest rates can be fixed or variable. Lenders often include restrictive covenants in loan agreements regarding working capital, debt levels, dividends, management changes, asset sales, and additional borrowing. Common sources of term loans include banks, insurance companies, finance companies, the SBA, and other government agencies.
This document provides an overview of equipment leasing basics. It defines what a lease is and describes the main types - capital/finance leases and operating leases. Capital leases are similar to purchases, while operating leases are more like rentals. The document discusses some common myths about leasing and explains the key benefits, such as preserving cash flow, obtaining tax benefits, and allowing for off-balance sheet financing with operating leases.
The document discusses various types of term loans and lease financing. It defines term loans as debt that is scheduled to be repaid in more than one year but generally less than ten years. Term loans typically involve regular payments of both interest and principal. The document also discusses the costs and benefits of term loans versus lease financing. It provides examples of different types of leases and factors to consider when deciding whether to lease or purchase equipment.
2. 2 Agenda Topics to be Covered: Lease Classification Operating Direct Financing Accounting and Reporting for Leases Operating Direct Financing Nonlevel Rents Leasehold Improvement Amortization Tenant Incentives Our Audit Approach Other Lease Issues and Current Developments
3. 3 Capital Leases (ASC 840—30) A capital lease is defined as a lease that meets one or more of the following criteria (ASC 840-10-25-1): The lease transfers ownership of the property to the lessee by the end of the lease term. The lease contains a bargain purchase option. The lease term is equal to 75 percent or more of the remaining estimated economic life of the lease property. The present value at the beginning of the lease term of the minimum lease payments equals or exceeds 90 percent of the excess of the fair value of the leased property. If a lease does not meet one of the above criterion it is classified as an operating lease.
4. Bargain Purchase Option A provision allowing the lessee, at his option, to purchase the leased property for a price which is sufficiently lower than the expected fair value of the property at the date the option becomes exercisable and exercise of the option appears, at the inception of the lease, to be reasonably assured.
5. Situation Moss Adams OC Construction and Real Estate group leases a Citation X twin engine jet for five years in order to better serve their clients in Baton Rouge, Louisiana. The original purchase price for this aircraft would be $19 million. The estimated fair price for this aircraft after five years is $11 million. The purchase option at the end of the lease is for $5.5 million.
6. POLLING QUESTION 1 Is the purchase option considered a bargain purchase? Yes Definitely not Maybe? What is a Po’ boy?
7. 75% Test If the lease term is equal to 75 percent or more of the estimated economic life of the leased property then the lease should be classified as a Capital Lease. Exception: If the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease.
8. 75% Test Lease Term - The fixed noncancelable term of the lease plus any of the following: covered by bargain renewal options all periods, if any, for which failure to renew the lease imposes an economic penalty all periods, if any, covered by ordinary renewal options during which there is a guarantee by the lessee of the lessor’s debt all periods, if any, covered by ordinary renewal options preceding the date as of which a bargain purchase option is exercisable. all periods, if any, representing renewals or extensions of the lease at the lessor’s option Estimated economic life: The estimated remaining period during which the property is expected to be economically usable by one or more users, with normal repairs and maintenance, for the purpose for which it was intended at the inception of the lease, without limitation by the lease term.
9. POLLING QUESTION 2 Which of the following should be considered in determining the term of a lease? All periods during which the lessee reasonably expects to lease the property A renewal period where an economic penalty is imposed on the lessee if the lessee does not renew under the renewal option All renewal periods prior to the period a bargain purchase option is exercisable All of the above Items 1 and 3 Items 2 and 3
10. 10 90 % Test If the present value at the beginning of the lease term of the minimum lease payments to be paid by the lessor equals or exceeds 90 percent of the fair value of the leased property to the lessor at the inception of the lease the lease is a Capital Lease. Exception: If the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease.
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12. 90% Test – Minimum Lease Payment Calculation 12 The Present Value of the Minimum Lease Payment is determined by using the lower of : The lessee’s incremental borrowing rate; or The implicit rate in the lease, if it is practicable for the lessee to learn the implicit rate; plus the guaranteed residual value (Hint: This is NOT always explicitly stated!) Contingent rentals
13. POLLING QUESTION 3 QUESTION: What best describes a company’s incremental borrowing rate? The rate of interest charged on the Company’s only loan LIBOR plus a spread of 100 to 500 basis points The rate included in a loan for equipment the Company is considering buying
14. Capital vs. Operating HANDOUT 1 – Key Equipment Finance dated11/20/2007 Additional Information: Asset Useful Life – 7 years DETERMINE IF THIS IS A CAPITAL OR OPERATING LEASE
15. POLLING QUESTION 4 Is the lease a capital or operating lease? Capital Operating
16. 16 Accounting for Capital and Operating Leases by Lessee Capital Leases Accounting Record an asset (leased equipment) and a liability (lease obligation) equal to the present value of the rental payments Record depreciation for the asset over the economic life of the asset Disclosures Include the gross amount of the asset, future minimum lease payments, total noncancelable minimum sublease rentals, total contingent rentals, and a general description of the lessee’s arrangements Operating Leases Accounting Do not record an asset or liability Record rental expense as rental payments are made to lessor Disclosures For leases in excess of one year include future minimum lease payments and total minimum rentals Include rental expense and a general description of the lessee’s arrangements
17. 17 Nonlevel Rents ASC 840-20-25-2 (Nonlevel Rents) When is the inception of these lease? What qualifies as a scheduled rent increase? The period between the lease agreement and completion of construction may be a rent holiday Straight-line recognition of lease expense Exceptions to the straight-line method
18. 18 Non-level (escalated) Rents Case Study Smith, a pharmaceutical company, leased office space from Jones. Smith took possession and began to use the building on July 1, 2009. Rent was due the first day of each month. Monthly lease payments escalated over the 5 year period of the lease as follows: PeriodLease Payment 7/1/09-9/30/09 $0- rent abatement during move- in/construction 10/1/09-6/30/10 $17,500 7/1/10-6/30/11 $19,000 7/1/11-6/30/12 $20,500 7/1/12-6/30/13 $23,000 7/1/13-6/30/14 $24,500 What amount of deferred rent would Smith show in balance sheet at 12/31/12?
19. Leasehold Improvement Amortization/Lease Terms 19 ASC 840-10-35-6 Leasehold improvements should be amortized over the shorter of the assets useful life or the lease term Lease term is defined as: Fixed non cancelable term of the lease plus: Periods covered by bargain renewal options Lease imposes an economic penalty such that renewal appears reasonably assured Renewal periods under which there is a guarantee by the lessee of the lessors debt. Include reasonably assured renewal periods
20. 20 Tenant Incentives ASC 840-20-25 Payments made to or on behalf of the lessee represent incentives that should be considered reductions of rental expenses Leasehold improvements funded by the landlord under allowances should be recorded as leasehold improvements and amortized over the life of the lease The incentives should be recorded as deferred rent and amortized as reductions to the lease expense over the lease term
21. 21 Sale-Leaseback Transactions ASC 840-20 What is a sale leaseback? Sale of property by the owner and a lease of the property back to the seller The same criteria are applied to determining whether or not the lease should be classified as a capital or operating lease There is generally a gain or loss that should be recognized (deferred, with some exceptions for “excess” gain). Guaranteed residual value should be considered for deferring any gain on the sale-leaseback
22. 22 Sale-Leaseback Transactions, (Continued) Recognition of Gain or Loss Defer gain or loss and amortize over amortization period of leased asset if a capital lease, or in proportion to the gross rentals charged to expense over the lease term EXCEPT in the following situations: The seller-lessee retains the rights to only a minor portion of the remaining use of the property sold. The seller-lessee retains the rights to more than a minor portion but less than substantially all of the remaining use of the property sold. The fair value of the property at the time of the transaction is less than its undepreciated cost. In that event, a loss should be recognized equal to the difference between undepreciated cost and fair value. (FROM PPC GAAP GUIDE)
23. 23 Polling Question 5 Under which situation is a sale of property NOT recorded as stipulated by sale-leaseback accounting? The seller-lessee retains, through a leaseback, retains substantially all of the benefits and risks incident to the ownership of the property sold. The seller-lessee relinquishes the right to substantially all of the remaining use of the property sold retaining only a minor portion of such use. The seller-lessee retains more than a minor part but less than substantially all of the use of the property through the leaseback. Both b and c All of the above
24. 24 Sale-Leaseback Transactions, (Continued) On December 31, 2009, XYZ Corp sold ABC Corp two airplanes and simultaneously leased them back. Additional information pertaining to the sale-leasebacks follows: Plane 1 Plane 2 Sales Price $600,000 $1,000,000 Carrying Amt (12/31/09)$100,000 $550,000 Remaining Useful Life 10 years 35 years Lease Term 8 years 3 years Annual lease pmts $100K $200K At 12/31/09 what amount should XYZ record as deferred gain on the transaction?
25. 25 Lease Amendments ASC 840-10-35-4 – Any change to provisions of the lease other than renewing or extending its term, in a manner that would have changed the classification of the lease had the changed terms been in effect at inception of the lease, are to be treated as a new agreement Evaluate new agreement for classification of lease (Capital v. Operating)
26. 26 Lease Amendments (Continued) Asset and obligation are adjusted by the difference between the PV of the new minimum lease payments and the present balance of the obligation The PV of the minimum lease payments under the revised agreement is calculated using the interest rate used to record the lease initially. Change results in a new agreement and a change in classification from capital to operating Asset and obligation are removed, gain or loss recognized, and new lease is accounted for as an operating lease Early lease termination Asset and obligation are removed and gain or loss is recognized
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29. 29 Our Audit Approach – Capital Leases Obtain and read copies of selected leases and any applicable amendments keeping in mind the issues If new lease during the year Test clients capital v. operating lease analysis Confirm lease terms (you will generally not be able to confirm the present value For leases selected for testing, obtain and test clients amortization schedule Does number of total payments and payments remaining agree to confirmation Is interest rate reasonable and consistent with other obligations of the Company Is term consistent with confirmation Is monthly payment consistent with confirmation Obtain and test clients capital lease roll forward For lease selected for testing, agree balances, interest paid, principal payments, to the amortization schedule Reconcile total interest to the general ledger Obtain and test clients capital lease payout For leases selected for testing, agree future amounts to the amortization schedule
30. 30 Polling Question 7 Is using a detailed schedule of leases showing annual rent payments to agree lease expense per the schedule to the client’s trial balance a SAP or test of details? SAP TOD OPEN FOR DISCUSSION?
31. 31 Current Developments FASB released a discussion paper on March 19, 2009 Summary version: Most of what we just covered will become irrelevant!
32. 32 Current Developments The Board has proposed an accounting model that will require the lessee to recognize an asset (the lessee’s right to use the leased item for the lease term) and liability (the obligation to pay the rental amount) in all lease contracts. The result will be a significant change: the elimination of off-balance sheet reporting of operating leases. The Boards believe this change will increase the transparency and comparability of lease accounting.
33. 33 Current Developments What’s in scope? Deliberations are ongoing, but currently all leases will be in scope, except the following: Leases of intangible assets, Leases to explore or use natural resources, Leases of biological assets. Contracts that represent the sale or purchase of an asset. Tentative concession made for short-term leases (such as for copiers and laptops) defined as having a maximum possible lease term less than 12 months. The lessee would recognize the gross amounts payable and a corresponding right-of-use asset under a short-term lease in the statement of financial position. The concession for short-term leases would be optional for lessors.
34. 34 Current Developments Measurement: The lessee’s asset and the liability initially would be recorded “at cost”, Cost = present value of the lease payments, discounted at the lessee’s incremental borrowing rate or implicit rate if easily determinable. Subsequent measurement of the lessee’s asset would be at amortized cost Account description would be amortization rather than rental expense. Impairment consideration under existing guidance would also be applied.
35. 35 Current Developments The lessor, using a performance obligation approach, would recognize an asset representing its right to receive rental payments from the lessee( a lease receivable) and a liability representing its performance obligations under the lease (i.e., its obligation to permit the lessee to use the leased item). Revenue would be recognized over the lease term, as the performance obligation is met. Subsequent measurement of the performance obligation would be at amortized cost using the effective interest method. Complex leases can have multiple components, such as renewal options, early terminations, purchase options, contingent rentals, and residual value guarantees. All the components of a lease would be looked at as a whole and not valued as individual components.
36. 36 Current Developments Timing and Transition: Assets and liabilities arise and would be recorded when a contract is signed. In addition, a company would provide disclosures about the assets and liabilities that arose upon contract signing. At the effective date of the new guidance, a lessee would apply the new lease standard by recognizing an obligation to pay rentals and an asset for the right of use for all outstanding leases at the transition date. No grandfathering of existing leases is expected to be allowed.
37. 37 Current Developments Potential Impact: Changing the fundamental basis of lease accounting will impact certain of our clients’ core operating decisions, such as lease versus buy and how to structure transactions. The change in accounting may drive changes in their capital planning and budgeting processes. And, the financial statement effects will certainly create a need to reconsider performance measures, key ratios, and financial covenants.
38. 38 Current Developments Next Steps: The proposal is under discussion with an Exposure Draft for public comment expected in Q3 2010, and a final standard expected in 2011. Many of our clients will be impacted by this proposed change, and would benefit from understanding it early. To facilitate an early discussion, get up to speed on this issue by visiting the lease project page on the FASB project pages, updated monthly.