Accounting for Leases

With the fact presented, the invitee was start out by a sunrise(prenominal) thickening with an opportunity that would require the customer to have one coulomb twenty trailers. The lymph glands current trailer turn over is coke that are 20 less than the needed amount. With the potential difference for evidential growth, there is in addition the uncertainty of how long the descent with the customer will last. The purpose of this memo is to yield the diverse leasing options and structures consort to the Financial Accounting Standards Board Accounting Standards code (FASB ASC) that the knob can engage into execute efficiently the subcontract required by the new customer. Besides the leasing options, the memo would also provide the impact the leasing options will have on the knob as well as recommendation on an approach that the client can use to evaluate and with child(p)ize on the opportunity. The three types of lead that the client should be consider ing for the opportunity are expire financial support withdraws, sales type leases, and operating leases. Direct financing leases is a type of jacket lease, and it refers to when the lessor of the chartered place bought the quality for the intent of leasing. The lessor is not the manufacturer or the dealer of the undertake property.

For a lease to be classify as a direct financing lease, there are a few criteria that the lease has to meet. According to ASC 840-10-25-43, the criteria are such of the four criteria for capital lease, the lease does not give rise of loss or profit of the manufacturers or dealers to the lessor o f the leased property, and so on (FASB, 2009! .) The ASC 840-30-25-7 depute that the lessor should recognize the gross investment of the leased property into the lease and unearned income of the financial statements (FASB, 2009.) According to ASC 840-30-50-4, in the balance sheet, the client would need to disclose the required information in relates to the lettuce investment, the time to come minimum lease payments and the contingent rentals (FASB, 2009)...If you want to render a full essay, order it on our website: BestEssayCheap.com

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