Mind map
Finance Lease
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Finance Lease
Is it really
- Major Criteria
- Other Criteria
- If cancelable
- LESSEE
- Minimum Lease payments
- BPO
- loss
- Guaranteed Residual V.
- loss
- None
- BPO
- Depreciation
- Life of asset
- BPO
- Guaranteed RV
- Shorter of life asset VS lease term
- Otherwise
- 75 major life
- 90 pmv close to fv
- Life of asset
- Payment
- Principal
- Interest
- Purchase
- CA of Asset + cash - lease liab = cost of purchased asset
- Minimum Lease payments
- LESSOR
- Direct Financing
- annual rental given
- Cost of machine = net investment / cost of machine plus initial direct costs = PV of gross rentals plus PV of residual value
- get unearned interest income
- Cost of machine = net investment / cost of machine plus initial direct costs = PV of gross rentals plus PV of residual value
- NOT given
- is there a transfer of title
- yes
- ignore residual value
- get annual rent
- get unearned interest income
- ignore residual value
- No
- use GUARANTEED residual value
- get annual rent
- still use UNguaranteed residual value OR guaranteed
- get unearned interest income
- use GUARANTEED residual value
- yes
- is there a transfer of title
- annual rental given
- Manufacturer's lease
- Direct Financing
Information
- Description
- Certificate Financial Accounting Mind Map on Finance Lease, created by Irene Eloisa on 25/02/2016.
- Created by
- Irene Eloisa
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