industries 1) Telecommunications 2) Equipment leasing 3) CRE Transactions are telecommunications equipment leases where note-holders are repaid from existing lease payments and future flows from lease renewals. In addition to the lease payments, noteholders typically secured by a first lien on the cell tower equipment as well as a security interest in the land or ground lease where towers are located. Collateral Pool -Transmission sites generally consist of Land, Towers, antennae, lines
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Project In July, 2006, the Board voted to add to its agenda a project on lease accounting. The project will be conducted jointly with the US Financial Accounting Standards Board (FASB) and is expected to result in the publication of a joint discussion paper in 2008. The project will reconsider all aspects of lease accounting and is expected to fundamentally revise the way lease contracts are recognized in the financial statements of lessees and lessors. The Board directed the staff to establish
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15.0 Introduction 15.1 Objectives 15.2 Concept of Lease Financing 15.3 Meaning of Lease Financing 15.4 Importance of Lease Financing 15.5 Types of Lease Agreements 15.5.1 Financial lease 15.5.2 Operating lease 15.5.3 Sale and lease back 15.5.4 Leveraged leasing 15.5.5 Direct leasing 15.6 Advantages of leasing 15.7 Leasing in India 15.8 Concept & Meaning of Hire purchase 15.9 Difference between Lease Financing and Hire Purchase 15.10 NSIC & Hire Purchase 15.11 Factoring 15.11.1 Factoring
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operating lease for Company ABC. To accomplish this, I will discuss a little background on all of the options and the advantages and disadvantages of a lease. This will aid company ABC in determining the best course of action for acquiring equipment in the future. First, what is a lease? “According to the Federal Accounting Standards Board (FASB), a lease is an agreement conveying the right to use property, plant, and equipment usually for a stated period of time” (Lee, 2003). Essentially a lease is an
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The bank has no relationship with Goliath Co. * The annual lease payments are $1,000,000 and payable over 12 months at the beginning of each month * Big Bear will pay the minimum payment plus the percentage increase in the Consumer Price Index (CPI) (most recent increase is 4%) Identification of Issues and Alternatives: The issue with this case is determining if the stated provisions will be included in the minimum lease payments. Provision one has two issues. The first dilemma is
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FISH & CHIPS, INC., PART I LEASE ANALYSIS Martha Millon, financial manager for Fish & Chips Inc., has been asked to perform a leaseversus- buy analysis on a new computer system. The computer costs $1,200,000; and if it is purchased, Fish & Chips could obtain a term loan for the full amount at a 10% cost. The loan would be amortized over the 4-year life of the computer, with payments made at the end of each year. The computer is classified as special purpose; hence, it falls into the MACRS 3-year
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Lease Finance Lease Finance • Lease is contract between the owner of the asset (Lessor) and the user (Lessee) of the asset, wherein the Lessor gives the right to use the asset to the Lessee for a consideration (Lease Rentals) over an agreed period of time (Lease period or tenure). • At the end of the lease period, the leased asset reverts back to the Lessor, unless the lease is renewed for another term. • Leasing separates the ‘Ownership’ and ‘Usage’ of the asset as two separate economic activities
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leasing agreement is an agreement whereby one party, the lease, pays lease rentals to another party, the lessor in order to gain the use of an asset over a period of time. There are two types of lease: A finance lease in which the is lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee. Another one is operating lease. That is lease other than a finance lease. To decide whether a lease is finance or operating, the first step is to assess whether
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Online Chapter 15 LEASE FINANCING AND BUSINESS VALUATION Learning Objectives After studying this chapter, readers will be able to describe the two primary types of leases, explain how lease financing affects financial statements and taxes, conduct a basic lease analysis from the perspective of the lessee, discuss the factors that create value in lease transactions, explain in general terms how businesses are valued, and conduct a business valuation using discounted cash flow and market multiple
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Group 1 ACCT 5321.001 Dr. Martin Taylor FASB/IASB Exposure Draft on Leases The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) published comment a revised Exposure Draft on Leases on May 16th, 2013 and closed on September 13th, 2013. Based on this exposure, two boards claimed that the existing financial reporting of leasing activities fails to meet the needs of users of financial statements. While the existing accounting principles require
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