Discuss the accounting treatment of Finance Leases and Operating Leases. Your discussion must centre on who accounts for the assets and the key principles involved
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Discuss the accounting treatment of Finance Leases and Operating Leases. Your discussion must centre on who accounts for the assets and the key principles involved
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- Explain and evaluate the eff ects on financial statements and ratios of finance leases and operating leases from the perspectives of both the lessor and the lessee.Explain the concept of accounting for leases and the criteria used to determine whether a lease should be classified as an operating lease or a finance lease. Discuss the implications of lease accounting on a company's financial position and performance.Accounting for operating capital lease. What are the issues that the accountant faces in recording such transactions and how they should be recorded on the financial stgatements of the company
- Leasing is often referred to as off-balance-sheet financing because of the way that the transaction is treated and reported in financial statements. According to the FASB-issued Statement 13, which of the following statements is true? Assets leased under financial or capital leases should be reported as fixed assets on the balance sheet. Leased assets should be reported as current assets on the balance sheet. The present value of all past lease payments should be reported as a liability on the balance sheet. The present value of all future lease payments should be reported as assets on the balance sheet.What are some important lease provisions which investors should be aware of when analyzing the financial statements of REITs?explain the make or buy decision process and describe how to perform the financial calculation in the simple lease or buy example provide in this chapter.
- Explain and evaluate the eff ects on financial statements and ratios of leasing assets insteadof purchasing them.What is the difference between a "capital/financing lease" and an "operating lease"? Where on the various financial statements would we expect to find each of these leases reported?Discuss the accounting and reporting for special features of lease arrangements.
- A lease is a financing instrument used by an entrepreneur to acquire assets for the business.describe and explain the two main types of leases, operating lease and finance lease, and include a discussion of the accounting treatment and tax impact of each. You may supplement your responses with research from outside sources.Describe the accounting procedures involved in applying the finance lease method by a lessee.In accounting for a finance lease/sales-type lease, how are the lessee’s and lessor’s income statements affected?