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

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: leasing

A: Introduction: Leasing is defined as an agreement between two parties known as lessor & lessee…

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: How does a leveraged lease differ from a nonleveraged lease?

A: A leveraged lease is an agreement that is partially financed by the third party creditor. In this…

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 are the differences between capital leases and operating leases?

A: Solution:- Differences between capital leases and operating leases as follows under:-

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: What situations cause us to remeasure a lease liability and right-of-use asset How is that…

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

Q: What is the difference between an “operating” and a “capital” lease? In easy terms please!

A: The criteria for defining the lease as a capital lease or operating lease   As per the notes issued…

Q: What do we mean by overage in a retail lease agreement? How might it be calculated?

A: Overage on retail lease contract and its computation as follows: Retail lease contracts show a least…

Q: What do you think is the main difference of accounting for lease on the part of the lessee and…

A: Lease is regarded as the contract between two parties those to use the asset of the owner by another…

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: 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: Explain the difference in lessor income statement presentation for a sales-type versus operating…

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

Q: Why is the reporting of leases required? Justify your response.

A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in return.…

Q: What are the features of lease?

A: The features of lease arrangements are, Residual type, Sale type leases, Bargain purchase option,…

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: The basic concept of “substance over form” influences lease accounting. Explain

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

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 difference between lease method and installment method?

A: Lease:   It is an agreement between an owner of an asset (Lessor) and a tenant (lessee) where the…

Q: In accounting for a Type B lease, how are the lessee’s and lessor’s income statements affected?

A: When accounting for finance lease/ Sales type lease, lease payments are made during the term of…

Q: What is meant by “loss to lease”? Explain?

A: Loss to lease: It is the term used in Real Estate in leasing of property mainly apartment complexes,…

Q: Discuss the residual value of the leased asset. How does it impact the PV of rental payments…

A: Lease means a type of agreement in which one party gives its valuable assets to other party for a…

Q: Describe about the EFFECT OF A RESIDUAL VALUE ON LEASE CLASSIFICATION?

A: Introduction Residual value is the amount, the asset's owner earns after selling/disposing that…

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: Explain Effective Cost of the Sale-Leaseback?

A: Sales leaseback is a type of financial transaction where the owner sold its property to the other…

Q: What is selling profit on a sales-type lease? How do we account for a sales-type lease with a…

A: Sales-type lease: Sales type lease in equivalent type of direct financing whereby the owner (lessor)…

Q: Define sale-and-leaseback

A: sale-and-leaseback

Q: opinion: Should lease payments be a current liability included in the acid-test ratio? why

A: Acid-test ratio: The financial ratio which evaluates the ability of a company to pay off the instant…

Q: In accounting for a Type A lease, how are the lessee’s and lessor’s income statements affected?

A: To state: how the lessee’s and lessor’s income statements are affected by finance lease/sales-type…

Q: What is leasing? Explain the process of leasing’s Underwriting process of Tenants.

A: Lease can be defined as a right to use equipment or capital goods on payment of periodical amount…

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 a seller financing differ from a land contract ?

A: In the real estate context, seller financing means the seller transfer the title to the buyer of the…

Q: What are the ways in which the accounting for the lease is affected?

A: Leases are a special item in accounting. There are mainly 2 types of lease: 1. Operating and 2.…

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: What factors would tend to affect the value of a lease?

A: Lease is a contract between two parties in which one party lends its property or asset to the other…

Q: In accounting for an operating lease, how are the lessee’s and lessor’s income statements affected?

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

Q: What are the characteristics of operating lease?

A: Definition: Operating lease: Operating lease is the type of lease in which the lessor allows the…

Q: Describe the lessee's accounting for sale-leaseback transactions.

A: Meaning:

Q: What is the requirement of the general description of the leasing arrangement?

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

Q: What is lease assignment? What is subletting? Explain at least one main difference between these…

A: In the world of finance in general and letting out of properties in particular the concepts of lease…

Q: What difference is between operating lease and finance leasing?

A: A lease is a financial agreement between two parties, i.e., lessor and lessee. A lessor is a person…

Q: Why do person choose to buy on lease?

A: Lease: Lease refers to a contract that outlines the terms under which one agrees to rent his or her…

Q: Which are the General Contents of Leases?

A: Lease is a contract between two parties (lessor and lessee), where one party (lessor) gives right to…

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.