What difference is between operating lease and finance 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: Why we will have a residual value in an operating lease?

A: Residual value is an estimated value of the asset at the end of lease term. In operating lease, we…

Q: leasing

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

Q: A lease that transfers substantially all the risks and rewards incidental to ownership of an…

A: A lease is normally called as finance lease if any of the following conditions are satisfied, The…

Q: True or False   Lease payments are paid by the lessor.

A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…

Q: What is guideline lease?

A: Guideline Lease:   A tax lease was drawn up under IRS models or "guidelines" to decide the…

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: In a Type A lease, “front loading” of lease expense and lease revenue occurs. What does this mean,…

A: Lease:An agreement of contract that is made to transfer the right to utlize the resources for 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: When are initial direct costs recognized in an operating lease? In a sales-type lease with selling…

A: Initial direct cost paid by the lessee is added to the right-of-use asset. If incurred by the…

Q: Describe the concept of direct financing lease.

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

Q: Why the lease is considered a “short-term lease”?

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

Q: What are the features of finance lease?

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

Q: Define Finance/Sales-Type Leases.

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

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: ect the le

A: Introduction : In simple words, leasing refers to the phenomenon under which an one entity use the…

Q: What are the pre-requisites of having a successful finance leasing?

A: Finance  leasing is the process wherein the finance company owns the asset legally throughout the…

Q: Would using a higher discount rate increase or decrease the amount of lease liability recorded?

A: Lease: A contractual agreement for an asset between two parties. The parties involved are lessee and…

Q: Why is lease financing sometimes referred to as off–balance sheetfinancing?

A: Lease is a type of an agreement that involves two parties i.e. owner (lessor) and lessee. In this…

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: What are the types of agreement related to sale-leaseback agreement?

A: Sale and Leaseback Agreement is a kind of financial transaction. This is a situation that arises…

Q: Leasing Cost Why the aftertax borrowing rate is the appropriate discount rate to use in lease…

A: Lease evaluation is the process where financial lease is evaluated on the basis of its feasibility…

Q: What are the economic benefits of leasing vs ownership of assets?

A: MEANING:- Leasing of Assets - The leasing of assets refers when the owner gives the right to use…

Q: What is meant by the term “off-balance sheet financing”? When do leases provide such financing and…

A: Financing in the normal course means the company has taken a loan from the investor when there is a…

Q: Explain the difference in lessee income statement and balance sheet presentation for a finance…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

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: Write down advantages and disadvantages of Lease financing.

A: Finance lease is for an essential term during which the arrangement can't be dropped. The length of…

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: Leasing Cost Explain why the aftertax borrowing rate is the appropriate discount rate to use in…

A: The borrowing rate is defined as the interest rate that includes many kinds of interest rates. The…

Q: What is the composition of lease Payments?

A: Lease is a kind of monthly rental payment made by the lessee to the lessor in return of the right to…

Q: The basic concept of “substance over form” influence lease accounting. Explain in detail how it does…

A: Substance over form is an accounting concept that business transactions should be accounted in…

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: statements be different in a leasing situation (for both operating leases and finance leases) for…

A: Leasing means an agreement between lessor and lessee in which lessor shall allowed to use the asset…

Q: inital direct cost are expensed under direct finance lease. If false, why?

A: A lease is a contract which provides the right or access to control the use of an identified asset…

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: Compare and contrast a finance lease with an operating lease.

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

Q: Briefly discuss the similarities and differences between GAAP and IFRS when it comes to leasing…

A: This question tells about when it comes to leasing accounting, there are certain parallels and some…

Q: Explain the accounting for finance leases.

A: A lessee should categorize a lease as a finance lease when any of the following criteria are met:…

Q: Define the term Lease Financing?

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

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: Compare the benefits and drawbacks to long-term vs. short-term leases from EITHER the point of view…

A: Lease refers to the contract between the parties in which one party agrees for renting an asset…

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: What is a short-term lease? Describe lessee accounting for a short-term lease.

A: Short-term LeaseThis is a type of leasing which has a maximum lease term ranging from 1 year or…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.