...Uniform Commercial Code (UCC) Legislative History On September 21, 1957 Massachusetts adopted the Uniform, Commercial Code. Effective October 1, 1958, the Code replaced the Uniform Sales Act, the Negotiable Instruments Law, the Uniform Warehouse Receipts Act, the Uniform Bills of Lading Act, the Uniform Stock Transfer Act, the Uniform Trust Receipts Act, and numerous other statutes. Massachusetts thus became the second state to enact the Code, following the lead of Pennsylvania, where the Code, enacted in April 1953, took effect on July 1, 1954. In March 1958 the Code was enacted in Kentucky, effective July 1, 1960. Proposals to enact the Code will undoubtedly come before legislatures in other states in the course of the next few years, and it seems likely that several other states will join the procession at their 1959 sessions (Braucher, 1958). The Uniform Commercial Code (UCC or the Code), first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America. The Uniform Commercial Code, or UCC, is a very large collection of legal rules regarding many important business, or “commercial,” activities. The UCC originally was created by two national nongovernmental legal organizations: the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI) (Steingold, 2013). As...
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...Writing Assignment 5 New Lease Accounting Standard On October 7 the FASB held it last decision meeting on their new lease accounting convergence project. The project is a joint project between the FASB and the IASB to change how leases would be recognized. Before leases may or may not have to be recognized on the lessee’s books. The new rule would require lessee to recognize the assets no matter what. The FASB originally was looking to implement the new standard by the end of 2015, but that will not happen. The transition will most likely take place somewhere in 2019. In the article “Lease Accounting Standard New Start Date Likely 2019” they talk about the difficulties faced by companies with this change. The first being that this change comes right along with the changes in revenue recognition, making this a balancing act become for companies to update to the new standards. Second most companies are not ready to take on this change. As stated in the article “Last year Deloitte found that almost 80% of the executives it surveyed were not ready for the standard, citing the quality of data, the complexity of compliance, and a lack of confidence in IT systems as the main concerns for companies.” The reason why I picked this article is because in class we most of the time take about the reasoning and methods and accounting entries that happen with transactions and how changes in practice affect how we recognize these transactions. But this article it adds a general background...
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...Agency: Real Estate under Virginia’s Agency Law Code of Virginia Agency Law § 54.1-2130. Definitions. As used in this article: "Agency" means every relationship in which a real estate licensee acts for or represents a person by such person's express authority in a real estate transaction, unless a different legal relationship is intended and is agreed to as part of the brokerage relationship. Nothing in this article shall prohibit a licensee and a client from agreeing in writing to a brokerage relationship under which the licensee acts as an independent contractor or which imposes on a licensee obligations in addition to those provided in this article. If a licensee agrees to additional obligations, however, the licensee shall be responsible for the additional obligations agreed to with the client in the brokerage relationship. A real estate licensee who enters into a brokerage relationship based upon a written contract which specifically states that the real estate licensee is acting as an independent contractor and not as an agent shall have the obligations agreed to by the parties in the contract, and such real estate licensee and its employees shall have no obligations under §§ 54.1-2131 through 54.1-2135 of this article. "Brokerage relationship" means the contractual relationship between a client and a real estate licensee who has been engaged by such client for the purpose of procuring a seller, buyer, option, tenant, or landlord ready, able, and willing...
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...value of leases in their books (50% - 50 poin) 1. Describe current accounting practices for leases as outlined in this article. Accountants distinguish between capital and operating leases. Capital leases go on the balance sheet while operating leases do not. Australian standards require that lease classification is based on the ‘substance’ of a transaction. However, the guidance criteria for what constitutes a capital lease (e.g. the requirements relating to the lease term covering a major part of an asset’s economic life) leave openings for companies to exercise discretion in classifying leases. US GAAP includes criteria such as the present value of minimum lease payments exceeding 90% of asset’s value. 2. Why does the author call leasing standards ‘silly accounting rules’? The author says the rules mean that companies exclude real assets and liabilities from their balance sheets. The effect of ‘off-balance’ sheet items is that a company’s assets and liabilities are understated and performance ratios such as return on investment are overstated. In addition, financial risk measures are not accurate and useful (‘bear no relation to reality’). Off-balance sheet items attracted attention at the time of the collapse of Enron in the USA in 2001. A report by the SEC in 2005 estimated that US companies were committed to US$1.25 trillion in lease payments relating to leases which did not appear on balance sheet. The author estimates that 90% of Australian leases are off-balance...
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...CHAPTER 19 REVIEW SHEET 1. Nature of sales and leases • Goods: are movable, tangible, personal property • Consumer Lease: the definition of a consumer lease requires that (1) the transaction meet the definition of a lease under article 2A (2) the lessor be regularly engaged in the business of leasing or selling goods (3) the lessee be an individual, not an organization (4) the lesse take the lease interest primarily for a personal, family or household purpose, (5) the total payments under the lease do not exceed 25,000 • Finance Leases: involves three parties, one party just provides financing. 2. Fundamental principles of article 2 and article 2A • Good Faith: honesty in fact in the conduct or transaction concerned. For a merchant good faith means the observance of reasonable commercial standards of fair dealing the trade • Course of dealing: If two parties have regularly conduct business on certain terms, the terms may be assumed to be same for each contract made, if not expressly agreed to the contrary. The parties must have dealt on numerous occasions and been aware of the term purported to be implied. • Usage of trade: A trade practice that is so common in a particular region or vocation that an expectation of its being followed in a given transaction is justified • Merchant: (1) who is a dealer in a particular type of good(2) who by his occupation holds himself out as having knowledge or skill peculiar to certain goods or practices or (3) who employs an agent...
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...privilege as a specialist to peruse the lease deliberately even more than two or three days is she needed before making all needed endorsements. Sudson is a systematic some other and they take part in business bargains that are good to them as an element since they are out to profit and all things considered they ought not be considered responsible for the misinterpretation on their customer's part. They reviewed an agreement and the resident did sign accordingly consenting to the terms and conditions set forth by Sudson Laundry Services. Sudson can contend that it was an authentic organization that draws in its business accomplices in lawful contracts in order to have a legitimate concession to what sort of connection they have and that was what they were going for when composing Letisha her agreement. The marked contract was only a path for Sudson and Letisha to have a legitimate tying as to their business dealings and engagements together and by marking it Letisha was lawfully bound by all the provisions in that...
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...Environment of Business Uniform Commercial Code Articles 1 and 2 Outline I. Introduction A. Historical Background and Philosophy The law of sales originated in the customs and traditions of merchants and traders. The Lex Mercatoria (Law Merchant) was a system of rules, customs, and usages self-imposed by merchants to settle disputes and enforce obligations among themselves. (See also Maritime Law and the Courts of Pied Poudre). The rules were established at fairs, at which merchants met to exchange goods and settle differences through courts established and operated by merchants. By the end of the seventeenth century, the principles of the Law Merchant had become widely accepted. Eventually, they became part of the common law, and judges refined them into the modern law of sales. In the United States, sales law varied from state to state, and this made multistate sales contracts difficult. In the late nineteenth century, when multistate contracts became the norm, the difficulties became especially troublesome, and attempts were made to produce a uniform body of law relating to commercial transactions. In the 1940s the need to integrate the laws covering commercial transactions into a single, comprehensive body of statutory law was recognized. The UCC was developed to serve that purpose. B. Structure (Articles) and Road Map C. Minnesota Application, MSA Chapter 336 D. Scope and Applicability of Article 2 Article 2 applies to transactions in goods, including...
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...A finance lease or capital lease is a type of lease. It is a commercial arrangement where: the lessee (customer or borrower) will select an asset (equipment, vehicle, software); the lessor (finance company) will purchase that asset; the lessee will have use of that asset during the lease; the lessee will pay a series of rentals or installments for the use of that asset; the lessor will recover a large part or all of the cost of the asset plus earn interest from the rentals paid by the lessee; the lessee has the option to acquire ownership of the asset (e.g. paying the last rental, or bargain option purchase price); The finance company is the legal owner of the asset during duration of the lease. However the lessee has control over the asset providing them the benefits and risks of (economic) ownership.[1] Treatment in India : Finance lease is the one in which risk and rewards incidental to the ownership of the leased asset is transferred to lesee but not the actual ownershipship. Thus in case of finance lease lease we can say that notional ownership is passed to the lesee. Treatment in the United States Under US accounting standards, a finance (capital) lease is a lease which meets at least one of the following criteria: ownership of the asset is transferred to the lessee at the end of the lease term; the lease contains a bargain purchase option to buy the equipment at less than fair market value; the lease term equals or exceeds 75% of the asset's estimated useful...
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...Without knowing what state or locality she lives in, it would be hard to tell for sure if this fact would help her or not. It is important to not only read the full contract before signing it, but also consult state and local laws. In an article found on www.kirchenbaumesq.com[->0], sometimes a renewal clause that shocks the court might not be enforced. This might be something that works in Letisha’s favor because part of Sudson’s renewal clause is that the lease will renew for three terms of five years each, which seems a bit outrageous. The same website says that some states also require companies to send out a notice advising customers of the provision for automatic lease renewal. It does look like Letisha may have a couple of ways that she might be able to get out of paying Sudson’s for another fifteen years. What legal arguments could be raised by Sudson in support of the enforcement of the automatic renewal clause against Letisha? The only argument I can find is that Letisha did not read the entire contract. As the phone representative said it was her responsibility to read the entire contract, front and back, large and fine print. What ethical issues are raised, if any, by Sudson’s practice of using the automatic renewal clause in their lease agreements? Ethically, Sudson’s should train their salesmen to advise customer to read the contract in its...
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...Act of the Parties o Termination of an Offer by Operation of Law o Acceptance • Ch. 11: Consideration and Promissory Estoppel o Introduction to Consideration and Promissory Estoppel o Gift Promise o Contracts Lacking Consideration o Settlement of Claims o Equity: Promissory Estoppel • Ch. 16: Remedies for Breach of Traditional and E-Contracts o Introduction to Remedies for Breach of Traditional and E-Contracts o Performance and Breach o Monetary Damages o Recission and Restitution o Equitable Remedies o Torts Associated with Contracts • Ch. 18: Formation of Sales and Lease Contracts o Introduction to Formation of Sales and Lease Contracts o Uniform Commercial Code (UCC) o Article 2 (Sales) o Article 2A (Leases) o Formation of Sales and...
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...Assignment 1: BUSINESS LAW Nguyen Viet Anh ( anhnvgh12604) Content: I Introduction II Analysis I: Introduction Nowadays Law always goes with life. It begin from everything example in work, if don’t understand about law people can’t open company, if don’t pay tax for government follow law of this country people will punish by police. And if one people can know all thing connection with law they will never scare anything even they can squeeze through law loopholes II: Analysis LO 1. Understand the essential elements of a valid contract in a business context Task 1 Explain and apply the importance of the essential elements required for the formation of a valid contract 1.1: Explain the importance of the essential elements required for the formation of a valid contract Law means rules were setting in one country and every one must comply with it. And as people know almost people in the world work base on contract and contract must comply with law. If one contract want effective it must require 5 elements: 1 Offer and acceptance; 2 Intention to create legal relations; 3 Consideration; 4 Capacity; 5 Privity of contract 1 Offer and acceptance: It means in one contract always exist 2 parties one people give offer and another people will accept with this offer or they can offer back and if they offer back first people will have accept or no. Example: A want buy one car of B with 10000 USD, but B think it not fair 10000 to small and he will talk “I don’t want sell...
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...Abstract By now most of us have heard and read numerous articles about synthetic leases. We also know synthetic lease transactions are relatively commonplace for financing corporate build-to-suits and acquisitions, and that they are widely accepted by corporate real estate executives, financial institutions, and accounting firms. But is the synthetic lease a panacea for the corporate executive faced with a leasing decision? Are they the perfect solution for keeping real estate assets oil the company balance sheet? Are there any drawbacks to a synthetic lease? Before entering into a synthetic lease, the corporate tenant should know the potential shortcomings of a synthetic lease as well as when and when not to use one. EBay - Enron Under a synthetic lease, a company designs a special purpose entity (SPE). The SPE exists exclusively to supply the parent company with an operating lease. Basically, it keeps debt off the parent company's books under existing accounting rules. The SPE is regarded as part of the parent company for tax purposes (Edman, 2011). A synthetic lease allows a company to keep debt off the books, but at the same time, is able to remove interest and depreciation as if they had bought and mortgaged the place. The parent company gets the tax benefits of ownership but suppresses the liability. As with operating leases, only a footnote disclosure is required. If this kind of financial...
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................................................ 488 B. Rental underSection 280A(g) ................................................................. 490 C . Lessee Improvements ............................................................................... 492 D . A DisguisedLease? .................................................................................. 493 Dividends ................................................................ 1. Constructive 495 2. Sale/Leaseback .................................................................................. .. ... .. ... ... .. ... .. ... 497 3. Activity Engaged in For Profit? ................................ .. .. ... ... .. .. ... ... 499 4. Does a Disguised Lease Exist Here? ............................ 499 V. LEASE V.LICENSE ............................................................................................. 501 V. C ON CLUSION ..................................................................................................... I. INTRODUCTION Not many people argue with the idea of helping families in need. Most in today's society have a soft spot for helping the less fortunate and wish they could do more to help others. This is where "Extreme Makeover: Home Edition" comes in. "Home Edition" is a reality television series that involves a "run-down house, a deserving family, several opinionated designers, [and] seven days."' Home...
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...Home Ownership or Renting It’s all About Getting the Most for the Dollar Courtney Booher Com 156 July 3, 2011 Home ownership has distinct advantages over renting property. Landlords and property management firms make hard sale pitches on the advantages of renting versus ownership. Many refer to the advantages listed on http://www.ourfamilyplace.com/homebuyerorrent.htmls Such as, fixed cost for the term of the lease, flexibility in moving, and the ill perceived thought that there is a smaller initial outlay of money. However, they fail to discuss the advantages of home ownership as identified by Elizabeth Wentraub in her article "Buy a Home" that is posted online at http://www.homebuying.about.com/od/buyahome.html. Wentraub discussed that even though real estate values are cyclical; in the long term real estate consistently increases in value. Why? There is only so much land available. Supply and demand dictate rising values. In addition she discussed the property tax advantages, capital gains exemption, mortgage interest deductions, and the use of home equity loans. When all things are considered, it is about getting the most for the dollars spent. That advantage goes to home ownership. As of 2009 67.9 percent of all owned property was occupied by the owner. Renting advocates tout the myth that there is a smaller outlay of initial dollars for renters. However, that is just not the case. Many federal programs allow individuals with...
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...University of Kentucky UKnowledge Faculty Publications College of Law 1-1-1987 Strict Liability for Chattel Leasing Richard C. Ausness University of Kentucky College of Law, rausness@uky.edu Recommended Citation Richard C. Ausness, Strict Liability for Chattel Leasing, 48 U. Pitt. L. Rev. 273 (1987). This Article is brought to you for free and open access by the College of Law at UKnowledge. It has been accepted for inclusion in Faculty Publications by an authorized administrator of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu. ARTICLES S TRICT LIABILITY F OR C HATTEL L EASINGt R ichard C. Ausness* Leasing has become an increasingly popular substitute f or outright purchases as a means o f acquiring products f or use. Few courts a nd commentators, however, have addressed the question o f whether the principles o f strict products liability which apply to sellers also apply to lessors. I n this Article, Professor Ausness reviews the historical basisfor imposing strict liability in tort on sellers a nd applies these rationales to five basic kinds o f lease transactions. H e concludes that strict liability should not apply when a product defect arises after the leased product is placed in the hands o f the lessee (as contrasted with the more typical case o f " manufacturing defects" which arise when the product is manufactured), nor when the leased product is a fixture attached to real property. I n such cases, the lessor should be held to a negligence...
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