Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Finance Lease shopping experience:
1. Compare - without doubt the biggest advantage that the Finance Lease offers shoppers today is the ability to compare thousands of Finance Lease at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Finance Lease? Wrong! If the Finance Lease is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Finance Lease then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Finance Lease? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Finance Lease and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Finance Lease wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Finance Lease then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Finance Lease site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Finance Lease, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Finance Lease, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
A
finance lease or
capital lease is a type of
lease - the other being an operating lease. A finance lease effectively allows a firm to finance the purchase of an asset, even if, strictly speaking, the firm never acquires the asset. Typically, a finance lease will give the lessee control over an asset for a large proportion of the asset's useful life, providing them the benefits (and risks) of ownership.
Treatment in the United States
Under US accounting standards, a finance lease is a lease which meets at least one of the following criteria:
- the lease term is greater than 75% of the asset's estimated useful life
- the lease contains a bargain purchase option to buy the equipment less than fair market value.
- ownership of the asset is transferred to the lessee at the end of the lease term
- the present value of the lease payments exceeds 90% of the total original cost of the equipment.
Following
GAAP accounting point of view, such a lease is classified as a
purchase by the lessee and is capitalized on the lessee's
balance sheet. See
FASB-13 for definitions between capital and operating leases.
Special Case: Finance Leases under UCC Article 2A
The term sometimes means a special case of lease defined by Article 2A of the
Uniform Commercial Code (specifically, Sec. 2A-103(1) (g)). Such a finance lease recognizes that some lessors are financial institutions or other business organizations that lease the goods in question purely as a financial accommodation and do not want to have the warranty and other entanglements that are usually associated with leases by companies that are manufacturers or merchants of such goods. Under a UCC 2A finance lease, the lessee pays the payments to the lessor (and indeed must do so, regardless of any defect in the leased goods – this obligation usually being contained in a “hell or high water” clause), but any claims related to defects in the leased goods may be brought only against the actual supplier of the goods. UCC 2A finance leases are usually easy to identify because they commonly contain a clause specifically declaring that the lease is to be considered a finance lease under UCC 2A.
Treatment in Australia
In
Australia the accounting standard pertaining to lease is AASB 117 'Leases'. AASB 117 was released in July 2004. AASB 117 'Leases' applies to accounting for leases other than: (a) leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources; and (b) licensing agreements for such items as motion picture films, video recordings, plays, manuscripts, patents and copyrights.
According to AASB 117, paragraph 4, a lease is: an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.
A lease is classified as a finance lease if it "transfers substantially all the risks and rewards incidental to ownership of an asset." (AASB 117, p8) There are no strict guidelines as to what constitutes a finance lease, however guidelines are provided within the standard.
External links
- Definition of capital lease
- AASB 117
- Capital Lease Provider
References
- Australian Financial Accounting, 4th edition, Craig Deegan ISBN 007471479-1
A
finance lease or
capital lease is a type of lease - the other being an
operating lease. A finance lease effectively allows a firm to finance the purchase of an asset, even if, strictly speaking, the firm never acquires the asset. Typically, a finance lease will give the lessee control over an asset for a large proportion of the asset's useful life, providing them the benefits (and risks) of ownership.
Treatment in the United States
Under US accounting standards, a finance lease is a lease which meets at least one of the following criteria:
- the lease term is greater than 75% of the asset's estimated useful life
- the lease contains a bargain purchase option to buy the equipment less than fair market value.
- ownership of the asset is transferred to the lessee at the end of the lease term
- the present value of the lease payments exceeds 90% of the total original cost of the equipment.
Following
GAAP accounting point of view, such a lease is classified as a
purchase by the lessee and is capitalized on the lessee's
balance sheet. See FASB-13 for definitions between capital and operating leases.
Special Case: Finance Leases under UCC Article 2A
The term sometimes means a special case of lease defined by Article 2A of the Uniform Commercial Code (specifically, Sec. 2A-103(1) (g)). Such a finance lease recognizes that some lessors are financial institutions or other business organizations that lease the goods in question purely as a financial accommodation and do not want to have the warranty and other entanglements that are usually associated with leases by companies that are manufacturers or merchants of such goods. Under a UCC 2A finance lease, the lessee pays the payments to the lessor (and indeed must do so, regardless of any defect in the leased goods – this obligation usually being contained in a “hell or high water” clause), but any claims related to defects in the leased goods may be brought only against the actual supplier of the goods. UCC 2A finance leases are usually easy to identify because they commonly contain a clause specifically declaring that the lease is to be considered a finance lease under UCC 2A.
Treatment in Australia
In
Australia the accounting standard pertaining to lease is AASB 117 'Leases'. AASB 117 was released in July 2004. AASB 117 'Leases' applies to accounting for leases other than: (a) leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources; and (b) licensing agreements for such items as motion picture films, video recordings, plays, manuscripts, patents and copyrights.
According to AASB 117, paragraph 4, a lease is: an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.
A lease is classified as a finance lease if it "transfers substantially all the risks and rewards incidental to ownership of an asset." (AASB 117, p8) There are no strict guidelines as to what constitutes a finance lease, however guidelines are provided within the standard.
External links
- Definition of capital lease
- AASB 117
- Capital Lease Provider
References
- Australian Financial Accounting, 4th edition, Craig Deegan ISBN 007471479-1
