at lower of cost of net realizable value (selling price less cost to sell/completion). If the NRV is lower than cost‚ the difference is charge to impairment loss. Tax provision Impairment loss deductible for tax purposes? Provisions to adjust inventories at NRV is not yet deductible (should be realized) The bases of valuation most commonly used by business concerns and which meet the requirements of the Income Tax Law are (Revenue Regulation 2) : (a) cost price or (b) net realizable value‚ whichever
Premium Generally Accepted Accounting Principles Balance sheet Asset
today’s commuting times substantially. However‚ they are facing 3 different options for funding this new acquisition. One of the options is to issue new bonds and therefore borrow the money and purchase these trains. The second option is a leveraged lease proposed by Bank of New York Capital Funding. The final option is to rely on federal funding. Some of the assumptions facing this acquiring of the asset are that they will have a useful life of 25 years. The train sets will also have a residual
Premium Depreciation Lease Finance lease
CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis *1. Rationale for leasing. 1‚ 2‚ 4 1‚ 2 *2. Lessees; classification of leases; accounting by lessees. 3‚ 5‚ 7‚ 8‚ 14 1‚ 2‚ 3‚ 4‚ 5 1‚ 2‚ 3‚ 5‚ 7‚ 8‚ 11‚ 12‚ 13‚ 14 1‚ 2‚ 3‚ 4‚ 6‚ 7‚ 8‚ 9‚ 11‚ 12‚ 14‚ 15‚ 16 1‚ 2‚ 3‚ 4‚ 5‚ 6 *3. Disclosure of leases. 19 2‚ 4‚ 5‚ 7‚ 8 2‚ 3‚ 5 *4. Lessors;
Premium Lease Depreciation Generally Accepted Accounting Principles
P1 revaluation model The revaluation model is an alternative to the cost model for the periodic valuation and reporting of long-lived assets. IFRS permit the use of either the revaluation model or the cost model‚ while under GAAP; only the cost model is permitted. Revaluation model changes the carrying amount to fair value. But the assumption is the fair value can be measured reliably. P2 revaluation model& cost model A key difference between the two models is that the cost model allows
Premium Generally Accepted Accounting Principles Lease Balance sheet
Chapter 15 Leases AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools‚ departments‚ and faculty may approach assessment and its documentation differently‚ one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor‚ we have labeled each question‚ exercise‚ and problem in Intermediate Accounting‚ 7e‚ with the following AACSB learning skills:
Premium Lease Finance lease
Capital Lease -Lessee Initially‚ the lessee recognizes the asset under his property‚ plant and equipment. The amount that should be debited is the Lower of asset’s fair value and present value of minimum lease payments. The present value is determined by discounting minimum lease payments using interest rates implicit in the lease. Also‚ initial direct cost that the lessee incurs in relation to the lease is added to the cost of recognized asset. On the credit side of the entry should be lease liabilities
Premium Lease Balance sheet Finance lease
..... 1 The applicable leasing structure .......................................................................................................... 1 1.1.1 1.1.2 Financing Leases ................................................................................................................................ 1 Operating Leases ................................................................................................................................ 1 2. 2.1 3. Background ..............
Premium Lease Finance lease Leasing
cost of funds • Availability of Funds • Debt : Equity Position • Nature of Assets (i.e. obsolescency) 2. What is Lease • Lease can be defined as contractual arrangement where the owner (lessor) of an equipment transfers the right to use the equipment to the user (lessee) for an agreed period of time in return of rental. • At the end of the lease period the asset reverts back to lessor unless there is a provision for the renewal of the contract or there is a provision for
Premium Finance lease Lease Leasing
financing‚ the leasing industry remains only vibrant financial intermediaries for the medium term financing with less than 5.0 percent non-performing loans. Lease financing‚ as organized in Bangladesh‚ operates with the following objectives: (a) to assist the development and promotion of productive enterprises by providing equipment lease financing and related services; (b) to assist in balancing‚ modernization‚ replacement and expansion of existing enterprises; (c) to extend financial support to
Premium Lease Finance lease Credit
000 $ 410‚000 $ 450‚000 Operating income . . . . . . . . . . . . . . . . . . . . . .$190‚000 $ 230‚000 $ 270‚000 Income taxes (30% of operating income) . . . .$ 57‚000 $ 69‚000 $ 81‚000 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .$133‚000 $ 161‚000 $ 189‚000 Exercise 23.12 William George is the marketing manager at the Crunchy Cookie Company. Each quarter‚ he is responsible for submitting a sales
Premium Lease Finance Revenue