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3#
发表于 2011-7-13 15:13
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To the best of my remembrance:
When a lease is treated as a Capital Lease,
Lessee will capitalize it as an asset in its B/S and will also add the same value to his Liability, thus keeping the equation A = L + E balanced. Now, actual payments made on the lease are divided as Interest and Principal payments (just like an amortized loan). Interest portion is taken as an expense and it is a cash outflow from CFO, and it reduces the Liability. While Principal portion of the payment reduces the Asset value and is taken as cash outflow from CFF. (Remember CFF affects assets and pp&e)
From the Lessor point, it is taken as if he is financing a sale. (It could be either a Financing Lease or a Sales type lease based on whether pv of payments to be received is greater than or equal to the current carrying value of that asset). In both cases, Interest portion of payment goes to increase CFO and the Principal portion goes to increse his CFI.
Hope it simplifies. |
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