September 16, 13 Financial Accounting Standards Board 401 Merritt 7 PO Box 5116 Norwalk CT 06856-5116 Dear FASB Technical Director, Thank you for your time and efforts to compose the exposure draft on leases to improve the accuracy of financial reporting. As accountants in Boulder Leasing Corporation, we believe that the new accounting models for both lessee and lessor will increase the accuracy of financial reporting by recognizing leasing assets on lessee’s balance sheet and disclosing
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Simulation Review Paper Patton-Fuller Health Care is a not-for-profit Community Hospital that has many different types of services. Some of the services that are provided within this hospital are: emergency medical care, physical therapy, radiology, cardiology, labor and delivery, and even surgery for everyone. The Cardiac Care Hospital is a very important part of the Patton-Fuller Hospital, within this paper analyzing the financial indicators that help with the decision making that help in both
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Accounting for Leases under IFRS Lease classification A lease is an agreement between lessor and lessee, whereby the lessor passes to the lessee the right to use an asset for an agreed period of time in return for a payment or series of payments. Under IFRS IAS (17) Leases we recognize two types of leases, finance and operating: IAS 17, paragraph 8: “A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as
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January 1, 2007 for three years. On expiration the equipment reverts to Lessor Ltd. Annual expenses include a lease payment of $100,000 and other expenses of $2,000 with no expenses incurred by Lessor Ltd. The remaining useful life of the equipment is 4 years. At the time, the equipment had a Fair Market Value (FMV) of $265,000. Lessee Ltd guaranteed a residual value of $20,000 by the end of the lease term. The salvage value of the equipment was estimated as $2000 at the end of the economic life. The lessor’s
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classify the lease through AASB 117 par 10-12: In order for the lease to be deemed as a financial lease, based on professional judgement it is deem necessary for at least two of the required standards set in either AASB 117 par 10 or par 11. AASB 117 par 10: a) Ballarat Ltd does not intend to buy the bulldozer at the end of the lease term, thus there would be no transfer of ownership of asset and the ownership of the asset will return back to Monash Ltd at the end of the lease term. (NO)
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The fair value of a liability for a lease termination under a cease-use date approach is the present value of the contractual obligation adjusted for valuation assumptions (e.g., market risk premium and/or profit margin) that reflect the amount a market participant would require to assume the obligation at the measurement date. In valuing a lease under the cease-use date approach, the fair value of the obligation should be determined based on the remaining lease rentals, adjusted for the effects of
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CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) | | |Brief Exercises | | | Concepts for | |Topics |Questions | |Exercises |Problems |Analysis | |*1. Rationale for leasing. |1, 2, 4 | |
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MFRS 119 Employee Benefits MFRS 119 define employee benefits as to prescribe the accounting and disclosure by employers for employee benefits. Thus, it replaces MASB Approved Accounting Standard IAS 19 Accounting for Retirement Benefits in the Financial Statements of Employees. The major changes from old IAS 19 are set out in the Basis for Conclusions. The Standard does not deal with reporting by employee benefit plans (see FRS 126 Accounting and Reporting by Retirement Benefit Plans ). From MFRS
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Concepts: a. Why do companies lease assets rather than buy them? 1. Companies lease long-term assets rather than buy them for many reasons. The tax benefits are greater such as, most lease payments can be fully deducted in the year you paid them, whereas major equipment purchases may have to be depreciated over several years. Since your money will likely be tighter in the beginning months and years of your business, the ability to offset lease expenses against your initial investments
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line * Low starting cost. “Leasing generally requires less cash down, and the monthly payments are often smaller” (Newman, 2006.). * “There's usually a tax benefit associated with leasing where you get to deduct the full lease payment immediately” (Newman, 2006). * The hospital can test out the new expansion for a short time to make sure that the expansion is what they need. 2.
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