Financial Accounting: Liabilities & Equities Class notes Barbara Wyntjes, B.Sc., CGA
|
|
- Paulina Rogers
- 8 years ago
- Views:
Transcription
1 Module 5: Leases Part 2: Assignment 17-1 (Chapter 17, page 1080) The lease term is eight years. Guaranteed residual value, none. Unguaranteed residual value, unknown BPO, none. Minimum net lease payment, ($24,000 $4,000) 8 years = $160,000. Incremental borrowing rate, 8%. Requirement 2 To be a capital lease, the lease would have to meet one of the following three criteria: 1. Transfer of title No 2. Economic life vs lease term No; 8/12 < 75% 3. PV of MLP vs fair value Yes; $114,933* > 90% of $125,000 *PV of MLP: PMT = ($24,000 $4,000), i = 8%, n = 8, FV = 0, P = $114,933 $114,933 $125,000 = 92%. Since criterion 3 is met, this is a capital lease. Beginning of fiscal year and lease term: Asset under capital lease ,933 Lease liability ,933 End of the fiscal year: Maintenance expense... 4,000 Lease liability... 20,000 Cash... 24,000 Interest expense... 9,195 Lease liability ($114,933.08)... 9,195 Amortization expense ($114,933 8)... 14,367 Accumulated amortization... 14,367 Requirement 4 If the lease were cancellable, the lease term would be (effectively) one year, and the minimum net lease payments, $20,000; $24,000 gross. The lease would not qualify for capitalization, and would be recorded annually as an operating lease: Rent expense... 24,000 Cash... 24,000 The annual payment could be split between rental and maintenance if Burrill wished. 1
2 Part 3: Assignment 17-3 (Chapter 17, pages ) #1 #2 #3 a. Lease term 7 years (1) 1 year 5 years b. Bargain purchase option $1 n/a n/a c. Unguaranteed residual n/a? n/a d. Guaranteed residual n/a n/a $75,000 e. Bargain renewal terms n/a n/a n/a f. Minimum net lease payments $150,001 (2) $9,200 $596,500 (3) g. Contingent lease payments n/a $7.40/hour n/a h. Interest rate to be used to discount 8% 10% 10% (1) Renewal term preceeds BPO (2) (($28,600 $2,600) x 5) + (($11,500 $1,500) 2) + $1 (3) ($104,300 5) + $75,000. Guaranteed residual is included. Requirement 2: Classification #1 Capital lease. Title passes (BPO). The PV of the MLP is also high to give the lessor return of principal and interest: a) ($28,600 $2,600) (P/A, 8%, 5) ( ) $103,810 b) ($11,500 $1,500) (P/A, 8%, 2) (P/F, 8%, 5) = $10,000 ( ) (.68058) 12,137 $115,947 (The BPO has a negligible PV). Note that since title passes to the lessee, this would be a capital lease for tax purposes as well. The lessor has no tax savings and all return comes from the lessee. #2 Operating lease. None of the capitalization criteria are met: this is a straightforward rental. #3 Capital lease. The lease term covers substantially all (5/6) of the asset s useful life. However, the PV of the MLP 's is not 90% of fair value, implying significant tax savings for the lessor or a lower interest rate: BGN PMT = $104,300, n = 5, i = 10%, FV = 75,000, PV =? = $481,486 #1 Asset under capital lease ,947 Lease liability ,947 #2 Maintenance and insurance expense... 1,400 Rental expense, machinery... 9,200 Cash... 10,600 The expense could all be recorded in rental expense #3 Asset under capital lease ,486 Lease liability ,486 Lease liability ,300 Cash ,300 2
3 Part 4: Assignment 17-7 (Chapter 17, pages ) This is a capital lease for Roscoe. They pay for the equipment and provide return to the lessor over the life of the lease: PV of MLP = PMT =$7,400, i = 7%, n = 5, PV =? = $30,342. $30,342/$32,500 = 93% The lease could also be classified based on the lease term vs economic life (100%) Requirement 2 Lease Amortization - End of Year Payments Outstanding Interest End of period Inc/(Dec) Ending Year Balance at 7% Cash Flow in Balance Balance 20x1 30,342 2,124 7,400 (5,276) 25,066 20x2 25,066 1,755 7,400 (5,645) 19,421 20x3 19,421 1,360 7,400 (6,040) 13,381 20x4 13, ,400 (6,463) 6,918 20x5 6, ,400 (6,916) (2) rounding 1 January 20x1 Asset under capital lease... 30,342 Lease liability... 30, December 20x1 Interest expense... 2,124 Lease liability... 2,124 Insurance and maintenance expense Lease liability... 7,400 Cash... 7,600 Amortization expense ($30,342/5)... 6,068 Accumulated amortization, asset under lease... 6, December 20x2 Interest expense... 1,755 Lease liability... 1,755 Insurance and maintenance expense Lease liability... 7,400 Cash... 7,600 Amortization expense... 6,068 Accumulated amortization, asset under lease... 6,068 Requirement 4 Interest expense, 20x1 $2,124 x 6/12 = $1,062 Interest expense, 20x2 $1,062 (2,124 x 6/12) (1,755 x 6/12) = $1,940 Requirement 5 FMV is less thus use that value and determine the IRR = Implicit interest rate = 14%; PV = 25,405, FV = 0, PMT = 7,400, n = 5; r = 14%. 1st yr interest: = $3,557; ($25,405 x 14%) 3
4 Part 6: Assignment (Chapter 17, pages ) : Annuity due = beginning of year payments Lease payments: PV = 600,000, r = 12%, n = 5, FV = 50,000, PMT =? = $141,585 Requirement 2: First: Capital or operating lease? Capital FV = 0, n = 5, r = 12%, PMT = 141,585, PV = 571,628 (rounded to 571,629) Income statement: Interest expense: ($571,629 $141,585beg) 12% $ 51,605 Amortization expense: $571,629 5 (straight line assumed) $ 114,326 Balance sheet: Leased computer equipment Accumulated amortization on leased equipment Lease liability (current)* Lease liability (long-term)* $ 571,629 dr. $ 114,326 cr. $ 141,585 cr. $ 340,064 cr. * Calculation of lease liability: Lease liability at inception $ 571,629 First payment (1 January 20X1) 141,585 Balance outstanding through 20X1 430,044 Accrued interest for 20X1 (above) + 51,605 Lease liability balance, 31 December 20X1 481,649 Current portion (lease payment due on the next day 1 January 20X2) 141,585 Long-term portion $ 340,064 4
5 Class Example 1: E Transportation leases most of its trucks. On July 1, 2005, E entered into a 5-year lease for a new truck with a fair value of $60,000. The payments are made at the beginning of each lease year. E has the option of purchasing the truck at the end of the lease for $5,000. The expected value at the end of the lease is $20,000. E s incremental borrowing rate is 10% and the implicit interest rate in the lease is 11%. The expected useful life is 8 years. Required: Calculate the lease payment. BPO because $5,000 significantly < $20,000. Lessor determines the payment thus use their rate of 11%. Calculation of lease payments: Annuity Due PV = fair value = $60,000, n = 5 years, i = 11%, FV = $5,000 (BPO), PMT =? = $13,902 THE END 5
LEASES: ASPE 3065. PMR NOTES HTK Consulting
LEASES: ASPE 3065 Scope The following items are not covered under this section: licensing agreements for items such as motion pictures, videotapes, plays, manuscripts, patents and copyrights Definitions
More informationInterest Expense Principal
ACCOUNTING BY THE LESSOR AND LESSEE A lease is a contract between a lessor (the owner of the property) and a lessee (the user of the property). Normally the lessee makes periodic payments in exchange for
More informationAdvanced Accounting 515-44B Leases Review Page 1
Advanced Accounting 515-44B Leases Review Page 1 LEASES REVIEW I. LEASE DEFINITIONS: a. Lease term: The fixed noncancelable portion of the lease plus all renewal terms that are reasonably expected to be
More informationLEASES: IAS 17. PMR NOTES HTK Consulting
LEASES: IAS 17 Scope This section does not apply to the following: Investment properties held by lessees (finance or operating) that are accounted for as an investment property (see IAS 40) Investment
More informationStudent Learning Outcomes
Chapter 15 Leases Part 2: Capital Leases Intermediate Accounting II Dr. Chula King Student Learning Outcomes Explain and use the criteria for determining whether a lease is capital or not Describe and
More informationLeases Learning Objectives. Overview of Leasing. Advantages of Leasing
Leases Learning Objectives 1. Describe the characteristics and advantages of leases 2. Operating leases vs Captial leases 3. Determine rental payments 4. Account for operating leases - lessee 5. Account
More informationThe Basics of Lease Accounting
The Basics of Lease Accounting Joe Sebik, VP - Global Originations & Structuring J. P. Morgan Leasing, Inc. (212) 899-1249 joseph.p.sebik@jpmorgan.com Howard Thompson, Director - Pricing & Economics Key
More informationfinreporting.com free online financial services
LEASE ACCOUNTING -LESSEE POLICY PERSPECTIVE A Lease is defined as an agreement conveying the right to use property, plant, or equipment (land and/or depreciable assets) for a stated period of time. This
More informationIF THE LEASE MEETS ONE OR MORE OF THE FOLLOWING FOUR CRITERIA, THE LESSEE MUST CLASSIFY AND ACCOUNT FOR THE ARRANGEMENT AS A CAPITAL LEASE:
ILLUSTRATION 22-1 LESSEE'S CAPITALIZATION CRITERIA IF THE LEASE MEETS ONE OR MORE OF THE FOLLOWING FOUR CRITERIA, THE LESSEE MUST CLASSIFY AND ACCOUNT FOR THE ARRANGEMENT AS A CAPITAL LEASE: 1. THE LEASE
More informationACCOUNTING FOR LEASES - COMPARISON OF INDIAN ACCOUNTING STANDARD AND US GAAP
D.S.RAWAT FCA ACCOUNTING FOR LEASES - COMPARISON OF INDIAN ACCOUNTING STANDARD AND US GAAP The comparison of lease accounting as per the Indian GAAP (AS-19) US GAAP SFAS-13 is based on (1) The similarities
More informationPREVIEW OF CHAPTER 21-1. Intermediate Accounting 15th Edition Kieso Weygandt Warfield
PREVIEW OF CHAPTER 21 21-1 Intermediate Accounting 15th Edition Kieso Weygandt Warfield 21 Accounting for Leases LEARNING OBJECTIVES After studying this chapter, you should be able to: 21-2 1. Explain
More informationCHAPTER 21. Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE
CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE Topics Questions Brief Exercises Exercises Problems Cases *1. Rationale for leasing. 1, 2, 4 1, 2 *2. Lessees; classification of leases;
More informationLEASES SCOPE/EXCLUSIONS
LEASES SCOPE/EXCLUSIONS What is a lease? A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of
More informationThis policy sets forth system-wide standards for financial accounting and reporting of leases.
Accounting for Leases Section: Accounting and Financial Reporting Title: Accounting for Leases Number: 05.281 Index POLICY.100 POLICY STATEMENT.110 POLICY RATIONALE.120 AUTHORITY.130 APPROVAL AND EFFECTIVE
More informationACCOUNTING FOR LEASES AND HIRE PURCHASE CONTRACTS
Issued 07/85 Revised 06/90 New Zealand Society of Accountants STATEMENT OF STANDARD ACCOUNTING PRACTICE NO. 18 Revised 1990 ACCOUNTING FOR LEASES AND HIRE PURCHASE CONTRACTS Issued by the Council, New
More informationLease Analysis Tools
Lease Analysis Tools 2009 ELFA Lease Accountants Conference Presenter: Bill Bosco, Pres. wbleasing101@aol.com Leasing 101 914-522-3233 Overview Math of Finance Theory Glossary of terms Common calculations
More informationAccounting for Leases
Accounting for Leases 15.511 Corporate Accounting Summer 2004 Professor SP Kothari Sloan School of Management Massachusetts Institute of Technology July 6, 2004 1 Agenda Understand the rationale for leasing
More informationAccounting for Leases
CHAPTER 21 O BJECTIVES After reading this chapter, you will be able to: 1 Explain the advantages of leasing. 2 Understand key terms related to leasing. 3 Explain how to classify leases of personal property.
More informationShort term leases, defined as a lease term of one year or less, are to be accounted for under the same operating lease method that currently exists.
Lease Accounting Updated January 2014 Page 1 Lease Accounting The pending changes in lease accounting have been a hot topic item since 2009, when the Financial Accounting Standards Board (FASB) and International
More informationCanadian GAAP - IFRS Comparison Series Issue 8 Leases
- Comparison Series Issue 8 Leases Both and are principle-based frameworks and, from a conceptual standpoint, many of the general principles are the same. However, the application of those general principles
More informationLease Accounting HARVARD UNIVERSITY FINANCIAL POLICY. Policy Statement. Reason for Policy. Who Must Comply. Procedures
HARVARD UNIVERSITY FINANCIAL POLICY Responsible Office: Financial Accounting and Reporting Date First Effective: 7/1/2014 Revision Date: N/A Lease Accounting Policy Statement This policy establishes accounting
More informationACCOUNTING BY THE LESSEE
Chapter 21 Accounting for Leases 21 1 CHAPTER 21 ACCOUNTING FOR LEASES This IFRS Supplement provides expanded discussions of accounting guidance under International Financial Reporting Standards (IFRS)
More informationCHAPTER 20 LEASES. MULTIPLE CHOICE Conceptual
CHAPTER 20 LEASES MULTIPLE CHOICE Conceptual Answer No. Description b 1. Essential element of a lease agreement. c 2. Identification of executory costs. d 3. Advantages of leasing. b 4. Current standards
More informationInternational Accounting Standard 17 (IAS 17): Leases
International Accounting Standard 17 (IAS 17): Leases By PAUL YOUNG, CGA This article is part of a series on International Financial Reporting Standards published on PD Net. Introduction Accounting for
More informationCLASSIFICATION OF LEASES
284 Accounting Standard (AS) 19 Leases Contents OBJECTIVE SCOPE Paragraphs 1-2 DEFINITIONS 3-4 CLASSIFICATION OF LEASES 5-10 LEASES IN THE FINANCIAL STATEMENTS OF LESSEES 11-25 Finance Leases 11-22 Operating
More informationStatement of Financial Accounting Standards No. 13
Statement of Financial Accounting Standards No. 13 FAS13 Status Page FAS13 Summary Accounting for Leases November 1976 Financial Accounting Standards Board of the Financial Accounting Foundation 401 MERRITT
More informationAFM 391 Case Concepts
AFM 391 Case Concepts a. Why do companies lease assets rather than buy them? 1. 100% financing at fixed rates. Leases are often signed without requiring any money down from the lessee, which helps to conserve
More informationCharacteristics of Leases
A lease is a contract in which the owner of an asset (the lessor) conveys to another party (the lessee) the right to use that asset. Characteristics of Leases The right to use the lessor s asset is granted
More informationTREASURER S DIRECTIONS ACCOUNTING LIABILITIES Section A3.6 : Leases
TREASURER S DIRECTIONS ACCOUNTING LIABILITIES Section A3.6 : Leases STATEMENT OF INTENT Assets required by Agencies to deliver outputs can be obtained by purchase or by lease. This Section provides the
More informationProject: Leases--Preliminary Views March 2009 Reference Number: DP/2009/1
abr/rev/dtcommentletter.rtf From: Professor Richard Macve, FCA, Hon FIA, Professor of Accounting Department of Accounting (E306) London School of Economics Houghton Street, Aldwych, London WC2A 2AE UK
More informationBox Credit, LLC Mill Valley, CA
Anders Norlin Mill Valley, CA Financing i of Storage Containers and related equipment Business Consulting Business Brokerage Founded 2001 by Tes and Anders Norlin 1 New Lease Accounting Standards What
More informationIntermediate Accounting
Intermediate Accounting Thomas H. Beechy Schulich School of Business, York University Joan E. D. Conrod Faculty of Management, Dalhousie University PowerPoint slides by: Bruce W. MacLean, Faculty of Management,
More informationPage 1. LKAS 17 -Leases. Nirmal Costa Director -Financial Accounting Advisory Services Ernst & Young. 10 th July 2012. Page 2
Page 1 LKAS 17 -Leases Nirmal Costa Director -Financial Accounting Advisory Services Ernst & Young 10 th July 2012 Page 2 What is a lease? 'an agreement whereby the lessor conveys to the lessee in return
More informationtechnical factsheet 183 Leases
technical factsheet 183 Leases CONTENTS Page 1 Introduction 1 2 Legislative requirement 1 3 Accounting standards 2 4 Examples 6 5 Checklist 8 6 Sources of information 11 This technical factsheet is for
More informationStudying Paper F7? Performance objectives 10 and 11 are relevant to this exam
RELEVANT TO ACCA QUALIFICATION PAPER F7 Studying Paper F7? Performance objectives 10 and 11 are relevant to this exam The accounting topic of leases is a popular Paper F7 exam area that could feature to
More informationLeases CHAPTER /// OVERVIEW /// LEARNING OBJECTIVES
CHAPTER 15 Leases /// OVERVIEW In the previous chapter, we saw how companies account for their longterm debt. The focus of that discussion was bonds and notes. In this chapter we continue our discussion
More informationMary Kelly, BBS, FCCA. Martin Kelly, BSc (Econ) Hons, DIP.Acc, FCA, MBA, MCMI.
Article: Accounting for Leases - IAS 17 Leases By: Mary Kelly, BBS, FCCA. Martin Kelly, BSc (Econ) Hons, DIP.Acc, FCA, MBA, MCMI. Examiner: Professional 1 Corporate Reporting Introduction IAS 17 Leases
More informationInsights into IFRS Lease Accounting
Insights into Accountants Group in Germany 54th AGiG Seminar 7 November 2006 WP StB CPA Karsten Ganssauge PwC International Reporting Group PwC Agenda US-GAAP Lease Accounting German GAAP Lease Accounting
More informationAssuming office supplies are charged to the Office Supplies inventory account when purchased:
Adjusting Entries Prepaid Expenses Second Bullet Example - Assuming office supplies are charged to the Office Supplies inventory account when purchased: Office supplies expense 7,800 Office supplies 7,800
More informationBECKER GEARTY CONTINUING PROFESSIONAL EDUCATION
Now & Next 973.822.2220 (ASC 840 f/k/asfas 13) Learning Objectives: To review recent developments in lease accounting and demonstrate how they have affected accounting for leases as prescribed under SFAS
More informationTypes of Leases. Lease Financing
Lease Financing Types of leases Tax treatment of leases Effects on financial statements Lessee s analysis Lessor s analysis Other issues in lease analysis Who are the two parties to a lease transaction?
More informationNew Accounting Standard Brings Big Changes to Lease Reporting on Financial Statements
New Accounting Standard Brings Big Changes to Lease Reporting on Financial Statements The Financial Accounting Standards Board (FASB) has issued its long-awaited update revising the proper treatment of
More informationSolutions to Chapter 8. Net Present Value and Other Investment Criteria
Solutions to Chapter 8 Net Present Value and Other Investment Criteria. NPV A = $00 + [$80 annuity factor (%, periods)] = $00 $80 $8. 0 0. 0. (.) NPV B = $00 + [$00 annuity factor (%, periods)] = $00 $00
More informationMarch 7, 2001 Part I. CAPITAL LEASES
LEASES March 8, 2001 Lease case study is divided into two sections: Part I: Capital Lease Illustrations showing a capital lease with another federal entity were excluded from the capital lease case study
More informationAccounting for Leases
Accounting for Leases Accounting for Leases Copyright 2014 by DELTACPE LLC All rights reserved. No part of this course may be reproduced in any form or by any means, without permission in writing from
More informationBasics of Tax Leasing (1)
Basics of Tax Leasing (1) 2007 ELFA Lease Accountants Conference Suresh Makam 914-899-7912 Citi Bankers Leasing Single Investor Lease Lessor purchases the equipment with equity or proceeds of recourse
More informationNASA Financial Management Requirements Volume 20, Chapter 6 Effective: September 2008 Expiration: September 2013 CHAPTER 6.
CHAPTER 6. CAPITAL LEASES TABLE OF CONTENTS 6.1 OVERVIEW...6-1 6.2 AUTHORITIES AND REFERENCES...6-1 6.3 ROLES AND RESPONSIBILITIES....6-1 6.4 DEFINITIONS....6-1 6.5 IDENTIFICATION...6-2 6.6 CAPITALIZATION
More informationChapter. Accounting for Leases. Learning objectives. 10.1 Introduction to accounting for leases
Chapter 10 Accounting for Leases Learning objectives Upon completing this chapter readers should: LO1 understand what a lease represents; LO2 understand the differences between operating leases and financial
More informationEXERCISE 6-4 (15 20 minutes)
EXERCISE 6-4 (15 20 minutes) (a) (b) (c) (d) Future value of an ordinary annuity of $4,000 a period for 20 periods at 8% $183,047.84 ($4,000 X 45.76196) Factor (1 +.08) X 1.08 Future value of an annuity
More informationLeases. Objectives. Understand the rationale for leasing and the distinction between Operating and capital leases.
Leases Objectives Understand the rationale for leasing and the distinction between Operating and capital leases. Understand the Income Statement and Balance Sheet differences Between operating and capital
More informationSummary of IFRS Exposure Draft Leases
April 2014 The International Accounting Standards Board (IASB) recently issued a revised Exposure Draft (ED) relating to leases. Once these proposals are finalized the new guidance will replace IAS 17
More informationReal Estate. Refinancing
Introduction This Solutions Handbook has been designed to supplement the HP-2C Owner's Handbook by providing a variety of applications in the financial area. Programs and/or step-by-step keystroke procedures
More informationPractice Problems. Use the following information extracted from present and future value tables to answer question 1 to 4.
PROBLEM 1 MULTIPLE CHOICE Practice Problems Use the following information extracted from present and future value tables to answer question 1 to 4. Type of Table Number of Periods Interest Rate Factor
More informationWeek 13, Chap 9 Accounting 1A, Financial Accounting
Week 13, Chap 9 Accounting 1A, Financial Accounting Reporting and Interpreting Liabilities Instructor: Michael Booth Understanding the Business Debt is considered riskier than equity. Interest is a legal
More informationInternational Accounting Standard 17 Leases
International Accounting Standard 17 Leases Objective 1 The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in relation
More informationTypes of Leases. Lease Financing. FINC 3630 Yost
Lease Financing Types of Leases Operating Leases Financial Leases or Capital Leases Sale and Leaseback Arrangements Combination Leases Synthetic Leases Operating Leases Payments include maintenance and
More informationProposed Lease Accounting Changes: Impact on Asset Finance Deals
Proposed Lease Accounting Changes: Impact on Asset Finance Deals In August 2010, the International Accounting Standards Board ( IASB ) issued a proposal which, if adopted, will overhaul lease accounting
More informationChapter 20 Lease Financing ANSWERS TO END-OF-CHAPTER QUESTIONS
Chapter 20 Lease Financing ANSWERS TO END-OF-CHAPTER QUESTIONS 20-1 a. The lessee is the party leasing the property. The party receiving the payments from the lease (that is, the owner of the property)
More informationAdapted, with permission, from The Canadian Institute of Chartered Accountants, Toronto, Canada, October, 1998.
Introduction to LEASING Adapted, with permission, from The Canadian Institute of Chartered Accountants, Toronto, Canada, October, 1998. COMMON LEASING TERMS The following list comprises some standard definitions
More informationI. GENERAL PROVISIONS KEY DEFINITIONS
APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 20 BUSINESS ACCOUNTING STANDARD OPERATING LEASE,
More informationLeases. Chapter 12. Prepared By: Eman Al-Aqeel. Professor : Dr: Amal Fouda
King Saud University College of Administrative Science Department of Accounting 2 nd Semester, 1426-1427 Leases Chapter 12 Prepared By: Eman Al-Aqeel Professor : Dr: Amal Fouda Leasing is an alternative
More information1. If you wish to accumulate $140,000 in 13 years, how much must you deposit today in an account that pays an annual interest rate of 14%?
Chapter 2 - Sample Problems 1. If you wish to accumulate $140,000 in 13 years, how much must you deposit today in an account that pays an annual interest rate of 14%? 2. What will $247,000 grow to be in
More informationIPSAS 13 LEASES Acknowledgment
IPSAS 13 LEASES Acknowledgment This International Public Sector Accounting Standard is drawn primarily from International Accounting Standard (IAS) 17 (revised 2003), Leases published by the International
More informationNEED TO KNOW. Leases The 2013 Exposure Draft
NEED TO KNOW Leases The 2013 Exposure Draft 2 LEASES - THE 2013 EXPOSURE DRAFT TABLE OF CONTENTS Introduction 3 Existing guidance and the rationale for change 4 The IASB/FASB project to date 5 The main
More informationlessee for lease too many problems. The required treatment of lease agreements can seem complex, but if you
The required treatment of lease agreements can seem complex, but if you understand the key points, questions on this topic should not pose too many problems. lessee for lease The required treatment of
More informationOff-Balance Sheet Financing: Operating Leases & Other Topics
Off-Balance Sheet Financing: Operating Leases & Other Topics Session 7 FIN 551 - Financial Statement Analysis 1 Let s Discuss Leases FIN 551 - Financial Statement Analysis 2 1 Off-Balance-Sheet Obligation
More informationELA Lease Accountants Conference
ELA Lease Accountants Conference Advanced Leveraged Leasing Financial Reporting Issues September 21, 2004 Betty Davis Washington, DC Discussion Items: Qualification issues Assumption changes Buying, selling
More informationLease accounting update
Financial Executives International 22 March 2012 Agenda Where are we now? Timing? What are the proposed changes to lease accounting? Overview of implications and considerations What are companies doing
More informationTechnical Accounting Alert
Technical Accounting Alert Investment property held under a lease Introduction Investment properties held under a lease are required to be classified as either a finance or operating lease. This alert
More informationSri Lanka Accounting Standard LKAS 17. Leases
Sri Lanka Accounting Standard LKAS 17 Leases CONTENTS SRI LANKA ACCOUNTING STANDARD LKAS 17 LEASES paragraphs OBJECTIVE 1 SCOPE 2 3 DEFINITIONS 4 6 CLASSIFICATION OF LEASES 7 19 LEASES IN THE FINANCIAL
More informationIASB/FASB Meeting Week commencing 16 May 2011. IASB/FASB Education Sessions Week commencing 9 May 2011. Lessee accounting other-than-finance lease
IASB/FASB Meeting Week commencing 16 May 2011 IASB Agenda reference 2D Staff Paper IASB/FASB Education Sessions Week commencing 9 May 2011 FASB Agenda reference 171 Contact(s) Kristin Bauer kdbauer@fasb.org
More informationTHE HONG KONG INSTITUTE OF CHARTERED SECRETARIES. Suggested Answers
THE HONG KONG INSTITUTE OF CHARTERED SECRETARIES Suggested Answers Level : Professional Subject : Hong Kong Financial Accounting Diet : December 2006 The suggested answers are published for the purpose
More informationIntercompany Indebtedness. Chapter 8. Intercompany Indebtedness. Consolidation Overview. Consolidation Overview. Intercompany Indebtedness
Chapter 8 Intercompany Indebtedness Intercompany Indebtedness One advantage of having control over other companies is that management has the ability to transfer resources from one legal entity to another
More information418 Chapter 13 Leases
CHAPTER 13 Leases Business firms generally acquire property rights in long-term assets through purchases that are funded by internal sources or by externally borrowed funds. The accounting issues associated
More informationCh. Ch. 5 Discounted Cash Flows & Valuation In Chapter 5,
Ch. 5 Discounted Cash Flows & Valuation In Chapter 5, we found the PV & FV of single cash flows--either payments or receipts. In this chapter, we will do the same for multiple cash flows. 2 Multiple Cash
More informationCHAPTER 6. Accounting and the Time Value of Money. 2. Use of tables. 13, 14 8 1. a. Unknown future amount. 7, 19 1, 5, 13 2, 3, 4, 6
CHAPTER 6 Accounting and the Time Value of Money ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems 1. Present value concepts. 1, 2, 3, 4, 5, 9, 17, 19 2. Use
More informationIAS - 17. Leases. By: http://www.worldgaapinfo.com
IAS - 17 Leases International Accounting Standard No 17 (IAS 17) Leases This revised standard replaces IAS 17 (revised 1997) Leases, and will apply for annual periods beginning on or after January 1, 2005.
More informationFASB-IASB Lease Project Update Interpreting latest revised proposal as conclusion nears
FASB-IASB Lease Project Update Interpreting latest revised proposal as conclusion nears Wednesday, June 19th at 2PM EDT Dial-in Info: 1-855-235-8283 Conference ID 76111778 Thanks for joining us! The webinar
More informationResidual Values Accounting for Exchanges of Risk and Value
Residual Values Accounting for Exchanges of Risk and Value Conservatism must be your guide. Equipment ownership is a hallmark of equipment leasing that sets it apart from other types of financing transactions.
More informationIPSAS 13 LEASES Acknowledgment
IPSAS 13 LEASES Acknowledgment This International Public Sector Accounting Standard (IPSAS) is drawn primarily from International Accounting Standard (IAS) 17 (Revised 2003), Leases, published by the International
More informationChapter 11. Long-Term Liabilities Notes, Bonds, and Leases
1 Chapter 11 Long-Term Liabilities Notes, Bonds, and Leases 2 Long-Term Liabilities 3 Economic Consequences of Reporting Long-Term Liabilities Improved credit ratings can lead to lower borrowing costs
More informationAccounting for Long-term Assets,
1 Accounting for Long-term Assets, Long-term Debt and Leases TABLE OF CONTENTS Introduction 2 Long-term Assets 2 Acquiring or creating 2 Tangible assets 2 Intangible assets 3 Depreciating, amortizing and
More informationSummary of Chapters. Preparation of Lease Determination Worksheet Part B
Summary of Chapters Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: Introduction Purpose of this handbook Background information on capital and operating leases Laws and regulations that govern
More informationAccounting Technician Examination
14 Feature Article: Consolidation Procedures Intra-group Transactions Between Parent and Subsidiary (relevant to ATE Paper 7 Advanced Accounting) Teresa M H Ho Introduction This article describes and illustrates
More informationThe leasing company might retain responsibility for maintenance
Understanding leasing When it comes to determining the most appropriate equipment leasing strategy for your school, understanding the main differences between a finance and an is essential. In both cases,
More informationFIN 5413: Chapter 03 - Mortgage Loan Foundations: The Time Value of Money Page 1
FIN 5413: Chapter 03 - Mortgage Loan Foundations: The Time Value of Money Page 1 Solutions to Problems - Chapter 3 Mortgage Loan Foundations: The Time Value of Money Problem 3-1 a) Future Value = FV(n,i,PV,PMT)
More informationA finance lease gives rise to depreciation expense for depreciable assets as well as a finance expense for each reporting period.
LEASING ARRANGEMENTS UNSW Accounting Procedure Linked UNSW Policy Responsible Officer Contact Officer Review Every year Effective Date 31 December 2013 Leases Director, Corporate Finance and Advisory Services
More informationAccounting Notes. Types (classifications) of Assets:
Types (classifications) of s: 1) Current s - short lived assets used in the operations of a business 2) Plant s - long lived tangible assets used in the operations of a business 3) Long Term Investment
More informationCHAPTER 25. P.25.16 The following data are furnished by the Hypothetical Leasing Ltd (HLL):
CHAPTER 25 Solved Problems P.25.16 The following data are furnished by the Hypothetical Leasing Ltd (HLL): Investment cost Rs 500 lakh Primary lease term 5 years Estimated residual value after the primary
More information1. The purpose of this paper is to discuss disclosure requirements for a lessor in the final leases standard.
IASB Agenda ref 3B STAFF PAPER July 2014 REG FASB IASB Meeting Project Paper topic Leases Lessor disclosure requirements CONTACT(S) Roberta Ravelli rravelli@ifrs.org +44 (0) 20 7246 6935 Scott A. Muir
More informationChapter 4: Time Value of Money
FIN 301 Homework Solution Ch4 Chapter 4: Time Value of Money 1. a. 10,000/(1.10) 10 = 3,855.43 b. 10,000/(1.10) 20 = 1,486.44 c. 10,000/(1.05) 10 = 6,139.13 d. 10,000/(1.05) 20 = 3,768.89 2. a. $100 (1.10)
More informationBA 351 CORPORATE FINANCE. John R. Graham Adapted from S. Viswanathan LECTURE 5 LEASING FUQUA SCHOOL OF BUSINESS DUKE UNIVERSITY
BA 351 CORPORATE FINANCE John R. Graham Adapted from S. Viswanathan LECTURE 5 LEASING FUQUA SCHOOL OF BUSINESS DUKE UNIVERSITY 1 Leasing has long been an important alternative to buying an asset. In this
More informationLEASE ACCOUNTING FOR STATE & LOCAL GOVERNMENTS
LEASE ACCOUNTING FOR STATE & LOCAL GOVERNMENTS April 7, 2015 Overview of GASB s Reexamination of Lease Accounting Guidance Andy Richards, CPA Partner arichards@bkd.com 1 TO RECEIVE CPE CREDIT Participate
More informationHKAS 17 Revised July 2012February 2014. Hong Kong Accounting Standard 17. Leases
HKAS 17 Revised July 2012February 2014 Hong Kong Accounting Standard 17 Leases HKAS 17 COPYRIGHT Copyright 2014 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting Standard
More informationLeases (Topic 840) Proposed Accounting Standards Update. Issued: August 17, 2010 Comments Due: December 15, 2010
Proposed Accounting Standards Update Issued: August 17, 2010 Comments Due: December 15, 2010 Leases (Topic 840) This Exposure Draft of a proposed Accounting Standards Update of Topic 840 is issued by the
More informationEducational Report: Sale-Leaseback Transactions (12/11/02)
In an August 2001 educational report, CFRA discussed accounting for lease transactions. In this report we highlight sale-leaseback transactions and discuss how companies can utilize saleleaseback transactions
More informationHARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013
HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
More informationTVM Applications Chapter
Chapter 6 Time of Money UPS, Walgreens, Costco, American Air, Dreamworks Intel (note 10 page 28) TVM Applications Accounting issue Chapter Notes receivable (long-term receivables) 7 Long-term assets 10
More informationThe explanations below will make it easier for you to use the calculator. The ON/OFF key is used to turn the calculator on and off.
USER GUIDE Texas Instrument BA II Plus Calculator April 2007 GENERAL INFORMATION The Texas Instrument BA II Plus financial calculator was designed to support the many possible applications in the areas
More information