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What are different types of lease agreement?
1 - Operating Lease 2- Financial Lease
If plant equipment is attached to leased property must the depreciable life of the equipment coincide with lease terms?
If the equipment was attached in such a manner that it could not be removed, you would depreciate it over the term of the lease or shorter.
Why operating lease are called off balance sheet?
Operating lease are called off-balance sheet because in operating lease asset is not transferred to balance sheet as it is not in full ownership of business so in this way company enjoys to use assets without affecting asset turnover ratios.
How are operating leases different from capital leases?
Operating lease does not give the ownership of the asset to lessee while finance lease gives the ownership of the asset as well at the end of leasing period.
Can a business depreciate a piece of real estate that they have a lease with option to buy provision but do not yet own the property?
Depreciation allocates the cost of a asset over its useful life (except land). If you don't own it, you can't depreciate it. The "right" to buy may never be exercised. Until it is, is usually has no value.
What are the 3 types of lease?
Leveraged Lease Financial Lease Operating Lease
What is meant by operating lease?
Operating Lease is a lease other than finance lease. A leasing transaction wherein the lessor takes the asset risk and the credit risk.
Definition of operating lease?
Operating Lease is a lease other than finance lease. A leasing transaction wherein the lessor takes the asset risk and the credit risk.
Difference between operating lease and finance leasing?
An operating lease does not transfer the risks and rewards to you (lessee) at the end of the lease period where a finance lease does. So in affect the operating lease can be thought of as renting the asset while a finance lease can be seen as a finance option to own the asset.
Capital lease and financing lease are the same thing?
Finance lease and operating lease are different things.
What are different types of lease agreement?
1 - Operating Lease 2- Financial Lease
What are different type of leases?
1 - Operating Lease 2- Financial Lease
Where are operating leases recorded in financial statements?
Operating lease is that kind of lease which is not done for entire useful life of assets and only lease rental are paid and expensed through income statement.
What statement does the operating lease appear on?
investing
If plant equipment is attached to leased property must the depreciable life of the equipment coincide with lease terms?
If the equipment was attached in such a manner that it could not be removed, you would depreciate it over the term of the lease or shorter.
How can an accountant determine whether a lease is a capital lease or operating lease?
If a copy of the lease agreement is made available to the accountant, this should be easily determined.
Why operating lease are called off balance sheet?
Operating lease are called off-balance sheet because in operating lease asset is not transferred to balance sheet as it is not in full ownership of business so in this way company enjoys to use assets without affecting asset turnover ratios.
