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Response to Client Request - Essay Example
Finance & Accounting
Pages 4 (1004 words)
Response to Client Request [University] [Instructor Name] Response to Client Request TO: The Supervisor FROM: The Officer DATE: 10 September 2011 SUBJECT: Leases and Lease Structures After conducting a research on the FASB website as instructed by you, a number of facts were retrieved regarding different types of leases and lease structures…
Since, in this case the client holds the position of the lessor and the customer that has reached the client would fill the place of the lessee in this agreement. Therefore, from the client’s perspective, the leases from the standpoint for lessor hold significant value. Sales-type leases are the leases that give rise to a profit or loss to the lessor with the lease agreement as it would have done had the leased property been sold. This is because the leased property is given to the lessee at the fair value of the property which may be higher or less than the actual cost of the property. Direct financing leases are a very important type of leases as they are widely used in the lease agreements. There are certain criteria that must be met in order for a lease agreement to quality for direct financing lease. ...
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