Resources for Accountants

Introduction to Leasing [Video]
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Introduction to Leasing [Video]

The most common way businesses acquired equipment and software in 2018 was through leasing, which financed 24% of purchases (2019 Equipment Leasing & Finance Industry Horizon Report). The leasing market is large, with 50 countries responsible for $1.36 trillion in leasing volume in 2019 (White Clarke Group, Global Leasing Report, 2021).So what is a lease? IFRS 16 states that a lease is present if a contract, “conveys the right to control the use of an identified asset for a period of time in exchange for consideration.” Leasing is thus a form of financing.The lessor in a lease agreement is the entity granting the right to use the property.The lessee in a lease agreement is the entity receiving the right to use the property.Thus, if a CPA firm pays a monthly fee to rent the 5th floor of an office building from its owner, the CPA firm is the lessee and the owner of the office building is the lessor.— Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people.— SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS* http://eepurl.com/dIaa5z— LISTEN TO THE SCHEME PODCAST* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc* Website: https://www.edspira.com/podcast-2/ — CONNECT WITH EDSPIRA* Website: https://www.edspira.com* Blog: https://www.edspira.com/blog/ * Facebook page: https://www.facebook.com/Edspira* Facebook group: https://www.facebook.com/groups/561316587899818//* Reddit: https://www.reddit.com/r/edspira* LinkedIn: https://www.linkedin.com/company/edspira— CONNECT WITH MICHAEL* Website: http://www.MichaelMcLaughlin.com* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin * Twitter: https://www.twitter.com/Prof_McLaughlin* Facebook: https://www.facebook.com/prof.michael.mclaughlin* Snapchat: https://www.snapchat.com/add/prof_mclaughlin*Twitch: https://twitch.tv/prof_mclaughlin * Instagram: https://www.instagram.com/prof_mclaughlin*TikTok: https://www.tiktok.com/@prof_mclaughlin

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The 3 Types of Lessors [Video]
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Resources for Accountants

The 3 Types of Lessors [Video]

When it comes to lease agreements, the 3 types of lessors are:(1) banks (2) captive leasing companies(3) independentsMany large banks have subsidiaries that structure leasing arrangements. Banks have an advantage in arranging leases because banks have access to low-cost funds from depositors.Captive leasing companies (often called “captives” for short) are subsidiaries of a manufacturer or a dealer. For example, Boeing has a subsidiary called Boeing Capital that arranges leases for customers who would like to lease aircraft from the parent company. The advantage captives have over banks is that a captive leasing company has access to the customer at the point of sale. If you’re thinking of leasing an airplane from Boeing, for example, the Boeing salesperson can have someone from Boeing Capital arrange the lease for you. Captive leasing companies sometimes offer more favorable lease terms than a bank because they are trying to help the parent company sells its products or services.There are also independent leasing companies that focus entirely on making lease arrangements, but these companies have a declining market share. — Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people.— SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS* http://eepurl.com/dIaa5z— LISTEN TO THE SCHEME PODCAST* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc* Website: https://www.edspira.com/podcast-2/ — CONNECT WITH EDSPIRA* Website: https://www.edspira.com* Blog: https://www.edspira.com/blog/ * Facebook page: https://www.facebook.com/Edspira* Facebook group: https://www.facebook.com/groups/561316587899818//* Reddit: https://www.reddit.com/r/edspira* LinkedIn: https://www.linkedin.com/company/edspira— CONNECT WITH MICHAEL* Website: http://www.MichaelMcLaughlin.com* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin * Twitter: https://www.twitter.com/Prof_McLaughlin* Facebook: https://www.facebook.com/prof.michael.mclaughlin* Snapchat: https://www.snapchat.com/add/prof_mclaughlin*Twitch: https://twitch.tv/prof_mclaughlin * Instagram: https://www.instagram.com/prof_mclaughlin*TikTok: https://www.tiktok.com/@prof_mclaughlin

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Advantages of leasing [Video]
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Advantages of leasing [Video]

There are several advantages to leasing for both the lessor and lessee. The advantages of leasing for the lessor are that:(1) you can make money on the interest(2) you can boost sales of your product or service (if you’re a manufacturer of a dealer)(3) the leased asset could end up having a high residual valueThe advantages of leasing for the lessee are that:(1) it optimizes cash flow (you can pay cash over time instead of paying all the cash to acquire the asset upfront)(2) it can be a cheaper source of financing (you might get a lower interest rate than if you had borrowed the money)(3) flexibility (the payment structure, lease term, and other details can be tailored to the lessee’s needs)(4) protection from obsolescence— Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people.— SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS* http://eepurl.com/dIaa5z— LISTEN TO THE SCHEME PODCAST* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc* Website: https://www.edspira.com/podcast-2/ — CONNECT WITH EDSPIRA* Website: https://www.edspira.com* Blog: https://www.edspira.com/blog/ * Facebook page: https://www.facebook.com/Edspira* Facebook group: https://www.facebook.com/groups/561316587899818//* Reddit: https://www.reddit.com/r/edspira* LinkedIn: https://www.linkedin.com/company/edspira— CONNECT WITH MICHAEL* Website: http://www.MichaelMcLaughlin.com* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin * Twitter: https://www.twitter.com/Prof_McLaughlin* Facebook: https://www.facebook.com/prof.michael.mclaughlin* Snapchat: https://www.snapchat.com/add/prof_mclaughlin*Twitch: https://twitch.tv/prof_mclaughlin * Instagram: https://www.instagram.com/prof_mclaughlin*TikTok: https://www.tiktok.com/@prof_mclaughlin

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Introduction to IFRS 16 (Leases) [Video]
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Introduction to IFRS 16 (Leases) [Video]

IFRS 16 establishes the rules for the recognition, measurement, and disclosure of leases for both lessors and lessees. The IASB issued IFRS 16 in January of 2016 (it replaced IAS 17).IFRS 16 had a substantial impact on the accounting for lessees because it requires lessees to capitalize all leases (with two exceptions). This means lessees must recognize a right-of-use asset and a lease liability upon commencement of a lease.The goal of IFRS 16 was to increase transparency in financial reporting. Prior to IFRS 16, lessees could structure leases so that the lease liability didn’t appear on their statement of financial position (aka balance sheet). Thus, leases were used as a means of off-balance sheet financing (to keep debt off a company’s balance sheet).IFRS 16 affects the the financial statements of lessees in the following ways:(1) they will report higher total assets and total liabilities than they would have reported under the old accounting rules(2) expenses will be front-loaded, because more interest expense will be recognized in the early years of the lease when the lease liability is higher(3) they will report a higher EBITDA than they would have reported under the old accounting rules— Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people.— SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS* http://eepurl.com/dIaa5z— LISTEN TO THE SCHEME PODCAST* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc* Website: https://www.edspira.com/podcast-2/ — CONNECT WITH EDSPIRA* Website: https://www.edspira.com* Blog: https://www.edspira.com/blog/ * Facebook page: https://www.facebook.com/Edspira* Facebook group: https://www.facebook.com/groups/561316587899818//* Reddit: https://www.reddit.com/r/edspira* LinkedIn: https://www.linkedin.com/company/edspira— CONNECT WITH MICHAEL* Website: http://www.MichaelMcLaughlin.com* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin * Twitter: https://www.twitter.com/Prof_McLaughlin* Facebook: https://www.facebook.com/prof.michael.mclaughlin* Snapchat: https://www.snapchat.com/add/prof_mclaughlin*Twitch: https://twitch.tv/prof_mclaughlin * Instagram: https://www.instagram.com/prof_mclaughlin*TikTok: https://www.tiktok.com/@prof_mclaughlin

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