What is non-tax-oriented lease?

Q: What is a purchase option? How does it affect accounting for a lease?

A: Purchase option : A purchase option is an agreement that gives the lessee a choice to purchase the…

Q: Why is the cost of financing with a sale-leaseback essentially the same as the return from…

A: Introduction: Financing costs are nothing but the interest and other costs that the company incurred…

Q: Why does the IRS place limits on lease provisions?

A: Introduction: Lease financing is a mutual relationship between the owner of the assets called as…

Q: What is the tax shield of interest?

A: Interest tax shields: It alludes to the assessment obligation decrease because of the interest…

Q: fair value model for investment property differ from the revaluation model for PPE

A: Fair value model and revaluation model are methods of valuation of non-current assets as per…

Q: What is a sale-and-leaseback transaction?

A: Sale and leaseback is a deal in which the owner of an asset trades an asset, typically real estate,…

Q: What is the concept of sale-leaseback agreement?

A:

Q: What are the advantages of lease?

A: A lease is a contract under the terms under which one party agrees to rent property owned by another…

Q: What is a synthetic lease?

A: The synthetic lease is a type of arrangement wherein the Parent company creates a separate entity…

Q: Explain Lease-versus-Own Analysis?

A: Owning is the right of an entitlement to an asset by purchasing it while leasing is the contract by…

Q: Why is it appropriate to compare the cost of lease financing with that of debtfinancing?

A: Cost of lease financing is the cost that is bear by the lessee who have owned the right from the…

Q: If the lessee and lessor use different interest rates to account for a finance/sales-type lease,…

A: Lease is agreement where lessor (asset owner) allows lessee (tenant) to use lessor’s asset for…

Q: What is the difference between a tax-oriented lease and a nontax-oriented lease?

A: A tax-oriented lease: A tax-oriented lease, occasionally named a true lease, which offer the lessor…

Q: What is the logic behind allowing tax loss carrybacks/carryforwards?

A: Logic behind allowing tax loss carrybacks and carryforwards: A tax loss carryback permits a company…

Q: Does a lessee have an option not to separate lease and non lease components?

A: Lease: A lease or a lease agreement is a binding contract between two parties that dictates…

Q: When can a lease create both an asset and a liability for the lessee?

A: Lease is an agreement between two persons in which one grants the right to another to use a…

Q: Why might leasing be advantageous for both the lessor and the lessee?   Group of answer choices…

A: A lessor is referred to as an individual, who used to grant the lease to someone else or some other…

Q: Who are the two parties to a lease transaction?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: Is taxable interest income generated via active or passive investments, or through a portfolio of…

A: The Answer

Q: Why is lease reporting required? Justification for your answer.

A: A lease is an arrangement in which an asset is rented out, and the Lessor gets a rental payment in…

Q: Taxable interest income is active or passive or portfolio ?

A: Active income is an income that is earned by performing a service. Active income includes salaries,…

Q: Why might refinancing be considered an alternative to a sale-leaseback?

A: Introduction: The given question is related to the concept of real estate finance and investments.…

Q: What is a deferred tax asset and how is the value created?

A: Deferred tax asset: When Income Tax Expense account is more than the Income Tax Payable account,…

Q: How do IRS regulations affect leasing decisions?

A: Regarding the lease of capital, IRS laws grant the leaser permission to collect data tax advantages…

Q: How are leases classified for tax purposes?

A: The two main classifications of leases which an affect the tax treatment are Capital Lease or…

Q: How do tax laws affect leasing?

A: Lease:   It is an agreement between two parties where the one party agrees to rent an asset owned by…

Q: What are some lease provisions that would cause a lease to beclassified as a non-tax-oriented lease?

A: Lease: A type of contract where one party gives property, land, or services to another party for the…

Q: What valuation allowance is used with respect to a deferred tax asset?

A: Deferred tax asset: A deferred tax asset refers to an asset that is recognized due to a temporary…

Q: How may the use of leases shift the risk of rising expenses from the lessor to the lessee?

A: A lease may be defined as a contract outlining the terms under which one party agrees to rent…

Q: What are the deductibility of real property taxes

A: Property taxes and real property taxes are interchangeable terms. They are levied on the majority of…

Q: What are the disadvantages of lease?

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular…

Q: Can the present value of minimum lease payments differ between the lessor and lessee? If so, how?

A: Leases: Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: What is a deferred tax asset?

A: Deferred tax asset: When the Income Tax Expense account is more than the Income Tax Payable account,…

Q: If the gains or losses from the fluctuation in the fair value of the residual accrue to the lessor,…

A: Lease accounting is the accounting to adjust the transaction where a fixed asset is taken on rent…

Q: What are the major advantages to a lessor for becoming involved in a leasing arrangement?

A: The Effect of Residual Values, Guaranteed and Unguaranteed is as follows: In setting the lease…

Q: How does the analysis of a sale-leaseback differ from the analysis of owning versus leasing?

A: A sale lease back is very beneficial for the company because it helps the company to sell the asset…

Q: What is the difference between an operating lease and a financial,or capital, lease?

A: Lease: Leases are agreements in which the proprietor of the asset permits another party to utilize…

Q: How does Leasing offer tax advantages?

A: Lease: A contractual arrangement between the owner of the asset and the user of the asset for a…

Q: What is a combination lease?

A: Combination leases is also one of the type of leasing & is considered to be customized form of…

Q: Which are the Factors Affecting Own-versus-Lease Decisions?

A: Owning an asset involves purchase of the asset using own or borrowed sources of funds, whereas…

Q: Why does a finance lease is economically similar to a purchase of the asset?

A: There are many similarities between purchase of a asset and Finance lease, such as: In a finance…

Q: Could a finance (capital) lease under IFRS be classified as an operating lease under U.S. GAAP?…

A:

Q: Define tax-oriented lease

A: A contract in which terms and conditions are mentioned at which one party agrees to pay a regular…

Q: What if Lease Terms are Modified?

A: Lease terms is a contractual agreement or obligation that is prepared and signed by both lessor and…

Q: What is financial lease?

A: Lease refers to the contract under which one party agrees to rent a property that is owned by…

Q: Should liability for rent deposit be amortized? Why or why not?

A: The assets are amortized as they provide benefits for the long period.

Renting Vs Buying

Renting means occupying a house for a period and paying an amount in exchange for such service. Renting does not require huge investments. Payments under renting are periodic and the amount is relatively low compared to EMIs.