(CFO) of Southwest Airlines. Southwest leases some of its planes. Suppose the leases can be structured either as operating leases or as capital leases. Which type of lease would you prefer for Southwest? Why? Consider what would happen to Southwest s debt ratio if its operating leases in footnote 8 were capitalized‚ and the related liabilities recognized. Computing Southwests debt ratio two ways (operating leases versus reclassifying them as capital leases) will make your decision clear (using Southwest
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New Jersey Commercial Lease Agreement A landlord of commercial premises in New Jersey requires New Jersey Commercial Lease Agreement to enter into a tenancy contract with the tenant. This 7-page legal instrument has 30 sections comprising of the tenancy terms and conditions. Please review them carefully and prepare this document together as various inputs are required from the tenant as well as the landlord. Notary acknowledgement of signatures is not necessary. Please do not use this document template
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Financial Accounting Changes to ’Lease’ accounting and its impact on the financial position and the performance of Qantas Table of Content 1. Introduction P.2 2. Glossary P.3 3. Discussion P.4 3.1 Description of the current lease contract P.4 3.1.1 Finance Leased and
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accounting for leases is the application of this concept‚ as the classification of a lease as either a finance lease or an operating lease‚ depends on the substance of the transactions rather than the legal form of the contract. IAS 17 distinguishes between two types of lease transactions: A finance lease and an Operating lease A finance lease “is a lease that transfers substantially all the risks and rewards inherent to ownership of the asset”. An operating lease is a lease other than a finance
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real estate transaction in which you were not certain whether the parties had a binding contract? Perhaps the buyer and seller had reached an oral agreement when another buyer made an offer on the property. Maybe one of the parties got "cold feet" and wanted to back out of the deal even after signing the contract. To determine whether parties have an enforceable contract‚ you must be familiar with two basic concepts of contract law: the Statute of Frauds and the concept of acceptance. The Statute of
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HOUSE LEASE THIS LEASE made as of -August 1‚2010-------------------BETWEEN ---Gregorio &Editha Andrada------------------------(THE LANDLORD) and ---Mary Jane Duyag-------------------------------------------------(THE TENANT). LEASE.The Landlord leases to the Tenant 7208 Beakrush Lane‚Winter Garden‚Florida 34787(the Premises) for a term of beginning on August 1‚2010 and ending on August 1‚2011(the term).Any occupancy by the Tenant of the Premises shall be subject to the
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ACCOUNTING FOR LEASES IFRS questions are available at the end of this chapter. TRUE-FALSe—Conceptual Answer No. Description T 1. Benefits of leasing. F 2. Accounting for long-term leases. F 3. Classifying lease containing purchase option. T 4. Accounting for executory costs. F 5. Depreciating a capitalized asset. F 6. Lessee recording of interest expense. T 7. Benefit of leasing to lessor. F 8. Distinction between direct-financing and sales-type leases. F 9. Lessors’ classification
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whereas fee based services of NBFCs include bill discounting‚ portfolio management and other advisory services. LEASE FINANCING Leasing as financial service is a contractual agreement where the owner (lessor) of equipment transfers the right to use the equipment to the user (lessee) for an‚ agreed period of time in return for a rental. At the end of the lease period the asset reverts back to the lessor unless there is a provision for the renewal of the contract or there is a provision
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July 18‚ 2011 3 Subject: Leases and Lease Structure Issues 4 To: Regional Trucking Company 5 From: Bob Stanton This memo will cover the current practice and thought related to direct financing‚ sales type‚ and operating leases. I understad that Regional Trucking Company have limited time to cover all aspects of these areas. Disclosure Requirements for Capital Leases SFAS No. 13 also requires the disclosure of additional information for capital leases. The following information must
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Memorandum To: Supervisor From: Date: March 14‚ 2011 Re: Leases and Lease Issues CONFIDENTIAL The trucking company currently owns 100 trailers and a new client have requested 20 more for a total of 120 trailers for its project. The relationship with the new client is uncertain but at the same time it has potential for significant growth of the company. The uncertainty of the relationship may have an effect on the financial position of the client company
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