Hire purchase contracts and Lease in business and how they work - Essay Example

Only on StudentShare

Extract of sample
Hire purchase contracts and Lease in business and how they work

The intention of this study is an Accounting Standard as a principle that explains the accounting structure, utilizing it as the conceptual foundation for its work. The major role of this Statement is to offer conceptual input into the ASB's job on the growth and review of accounting standards. The study consists of various procedures regarding the “SSAP 21” (SSAP 21 Accounting for Leases and Hire Purchase Contracts 1997) and its recent amendment. The aim of financial reports is to offer information on the subject of the reporting entity’s fiscal performance and monetary position which is helpful to a large range of users for evaluating the stewardship of the entity’s organization and forming economic decisions. “Financial statements need to reflect the effects of transactions and other events on the reporting entity’s financial performance and financial position. This involves a high degree of classification and aggregation. Order is imposed on this process by specifying and defining the classes of items—the elements—that encapsulate the key aspects of the effects of those transactions and other events”. An operating lease is a lease that is not a “finance lease”. Expenses under an operating lease are taken to the statement of comprehensive income on a straight-line basis more than the lease term, unless an additional methodical basis is more suitable. “SSAP 21; paragraph 17 defines a finance lease as ‘...a lease that transfers substantially all the risks and rewards of ownership of an asset to the lease’. SSAP 21 also defines an operating lease as simply ‘...a lease other than finance lease’” ...
Download paper

Summary

This research aims to evaluate and present the way in which leases are currently differentiated and accounted for; in accordance with SSAP 21. Accounting for hire purchase and lease agreements are dealt with in the provisions offered in SSAP 21 ‘accounting for hire purchase and leases contracts’ and IAS 17 leases…
Author : hillsnicole

Related Essays

Ijarah Contracts Used By Islamic Financial Institutions
It assists in strengthening the financial system of the country. The stronger the economy the stronger the country is. There are two kinds of banking systems and they are Islamic banking and the Conventional banking. Islamic banking is significantly different from conventional banking, and some of the differences are discussed in this essay. This report talks about an important feature in banking system i.e. lease. In conventional banks, it is referred to as conventional lease; and in Islamic bank, the lease is known as Ijarah. “Ijarah derives from the root word ajar a – to recompense,...
10 pages (2510 words) Essay
Leases and lease structures
The lessee gets full control of the asset so leased and makes payments on monthly basis or as the contract specifies. The lessee gets right over tax benefits of interest and depreciation without violating the rights of the lessor. The lease arrangement is a form of sourcing for finance for a contractor. The contract should clearly indicate the specified assets to be leased, the size and even the cost and period of time it will be used. The period of contracting is non-cancellable. However, the options of extending or terminating the lease are and should be discussed and put on the contract....
3 pages (753 words) Essay
How Would You Value a Firm That You Were Trying To Purchase?
Holton and Bates 2009, elucidates that there are a number of methods through which a potential purchaser of a particular firm may apply in an effort to realize the value of that firm. The methods may include: Free Cash Flow Methods, Asset-Based Methods, Option-Based Valuation method, and the method of using Comparables, These tools or methods of valuations would in return assist the potential purchaser of the firm to analyze and make an informed purchasing choice. Discussion To begin with, the asset-based method can be efficiently used be an intending purchaser to value a give firm. This...
3 pages (753 words) Research Paper
How stakeholders influence business activities?
26). The key groups of stakeholders include but are not limited to employees, business partners, customers, and communities. “[T]he type of interest and degree of influence of each group varies between different types of stakeholders and different types of businesses” (Carysforth and Neild, 2000, p. 189). Stakeholders carry weight in the business activities as well as the decisions made by the company. Owners Owners are best able to judge the performance of a business. If a business makes more profit, it increases the likelihood of re-election of the directors of business in the subsequent...
5 pages (1255 words) Essay
lease assingment
The first item that appears uncomfortable is leasing the bedroom apartment because I am not allowed to use any other part of the premise. Flexibility should be enhanced to all tenants by the proprietor in terms of using other sections of the premises (Jacobus 282). Another problem in the lease is that the contract runs for a year. As a tenant, I have no flexibility in terms of terminating the contract before the stipulated period. Moreover, the property manager, who is Joe Daworker, is responsible for handling issues concerning use of premises. A problem may arise making me want to talk...
3 pages (753 words) Essay
Lease Review Assignment
These clauses will be discussed and possible remedies for change given. One problem that may arise from the lease agreement has to do with the no pets allowed clause. This is because I own a pet that I have owned for a long time and which is a family favourite as it helps an autistic cousin who lives with us. Two types of laws, which would provide a tenant with the right to keep their pets where there is a provision against pets like this exist. One of them is local or municipal law, which holds that provisions against keeping pets are waived if the tenant keeps a pet and the landlord does not...
4 pages (1004 words) Assignment
Currency Future Contracts
Some buyers and sellers of the instrument used it for speculation. The named instruments are not only used to hedge against unfavorable movements in the value of currency but also in other economic factors such as interest rate, exchange rates and natural calamities (CME group, n.d .). These contacts are reliant on some underlying assets thus are called the derivatives. First, swap is a derivative that involves an agreement between two or more traders to exchange the denomination of their cash flows. For instance, consider two investors from the US and the UK, who have invested in the local...
4 pages (1004 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!