Finance Leases Flashcards
Executors costs in finance leases
Capitalized as lease payments receivable by lessor or a obligation under a finance lease by the lesser
Finance lease for lesser
Sales-type lease for lessor
Criteria is met if any of the following are true at commencement:
Title transfers to lesser at end of term
Lease contains purchase option lesser reasonably certain to exercise
Lease term is for major part of remaining economic life
Present value of sum of lease payments & any lessee guaranteed residual value not already in the lease pmts equals or exceeds substantially all of the fair value of the asset
Underlying asset is specialized & not expected to have alternative use to lessor at end of term
Types of finance leases from perspective of lessor
Sales-type
Direct financing
Operating (not for finance lease arrangement)
