Finance Assignment Help With Financial Reporting By Lessors

Financial Reporting By Lessors

A sales-type lease is used by manufacturers and includes a manufacturing or merchandising profit as well as interest income reflecting the financing element of the transaction.

A financial institution uses a direct-financing lease when the only profit is from interest income.

For a lessor to treat a lease as a capital lease (which they would generally prefer) it must meet at least one of the already discussed above and both of the following criteria:

• Collectability of the MLPs is reasonably certain.
• There are no significant uncertainties regarding the amount of reimbursable costs under the lease agreement.

Financial statement reporting for a sales-type lease

• Gross investment is the sum of lease payments and residual value.
• Net investment is the sum of present value of lease payments and residual value.
• Gross minus net investment is the unearned income or interest component of the lease.
• Sales revenue is the present value of lease payments.
• COGS are manufacturing costs less the present value of the residual value.

Email Based Assignment Help in Classification Of Leases

Following are some of the topics in Leasing and Off-Balance-Sheet Financing in which we provide help: