Interested to Buy Any Domain ? << Click Here >> for more details...
Answer Posted / asad
A. Operating Lease
An operating lease is basically a lease which is not a
finance lease
B. Capital Lease
A capital lease is a rental agreement in form, but the
substance of the transaction is an asset purchase. With
capital leases, the lessee records and asset and related
liability rather than rental expense. The lessee also record
depreciation on the asset. If a lease agreement meets any
one of the following criteria, it is considered to be a
capital lease:
1. The lease term is equal to 75% or more of the life of
the asset.
2. The present value of the minimum lease payments is
equal to at least 90% of the cost of the asset.
3. The lease transfers ownership of the asset to the
lessee at the end.
4. The lease contains a bargain purchase option (the
option price is so low we know that the lessee will exercise
the option to purchase the asset.
| Is This Answer Correct ? | 2 Yes | 0 No |
Post New Answer View All Answers
What is a Limited company?
How successful is the Make in India initiative taken by the government?
What are the different types of expenditures used in accounting?
What is a leveraged buyout?
How would you estimate American Airline's annual revenue?
what is the short cut to recall the last narration saved for the first ledger in the voucher?
What are your views on social networking sites?
What are the different types of tools provided to the investors to keep track of the activities going on in the stock market?
Why does stock exchange give negative returns?
Explain the concept of finance accounting?
What is the old name of syndicate bank?
What do you mean by innovation?
What type of insurance policies are there?
How are local area banks different from small banks?
Explain debt service coverage ratio. What does it indicate?
