Accounting

In Accounting original carrying value of the property formed the basis of the total lease payments under the lease agreement. If the compounds are not included purchase price, it would mean that not all costs associated with the acquisition of the leased property, included in the original cost. In our opinion, for accounting purposes and the tax assessment on property that has an initial value of the property taken at the balance sheet lease agreement, must be formed based on the total amount of lease payments, with the addition of the redemption price, if it is not included in the total amount of lease payments. At Pacific Mortgage Services you will find additional information. In which case, the contract should provide for the payment of redemption price, in excess of the total amount of lease payment? The economic basis for allocating the redemption price occur when the costs Lessor related acquisition of the leased property and bringing it to the state suitable for use, no lessee may be reimbursed within the established parties of the lease, despite the fact that the parties to the calculation of lease payments laid depreciation based on the regulatory useful life skorektirovannogo on the mechanism of accelerated depreciation. If you strictly follow this method of calculating the lease payments, the redemption price will be exactly equal residual value of leased property according to tax records. Variations occur when the above method of determining the lease payments are not strictly enforced, which is quite acceptable in practice since under civil law, the parties are free under certain conditions and the contract price.