Lease Accounting

Sales-Leasebacks: The Devil is in the Details

ASC 842 expands the failed sale-leaseback concept to include equipment. Under ASC 840, only real estate was subject to this accounting approach. Unless the current tax rules change, a similar issue arises when considering the tax effect of certain sale leasebacks. These factors mostly affect the lessee however lessors should be aware of them when structuring leases. Joe Sebik explains the accounting and tax ramifications and considers how the approaches may have to change to accommodate the new rules. ... read more

Software Concepts for Reporting Lease Accounting Standards Codification 842

This article discusses reporting concepts and solutions for systems specifically designed to meet the reporting requirements of both the lessor and lessee under ASC 842. While placing considerable focus on lessee reporting, new software has the opportunity to create simplified and powerful reporting and structuring capabilities for the lessor.... read more

Leasing as a Bank Product: Enhancing Profits and Customer Relationships

Banks have been jumping into the equipment finance business and now have the largest share of the market. But many banks have yet to take this vital step. With newcomers in mind, Bill Bosco covers the basics of incorporating a lease product business unit into a larger bank organization.... read more

Is the Service Contract the new Operating Lease?

With ASC 842 requiring all leases to be placed on balance sheet, will more lessees seek to structure equipment financing arrangements as service contracts, and is that really possible?... read more

Taking Advantage of Tax Reform: Lease vs. Own Analyses for Sales Reps

Following tax reform, Joe Sebik discusses the need for lease salespeople to become more skilled in generating lease-versus-own financial analyses. ... read more

The Effect of Tax Reform: The Good, the Bad and the Unclear

In the second installment of a series, Joe Sebik discusses the potential upsides and pitfalls of the Tax Cuts and Jobs Act.... read more

The Effect of Tax Reform: Major Changes for the Equipment Finance Industry

In the first article of a series, Joe Sebik discusses the Tax Cuts and Jobs Act and summarizes the major changes in store for the equipment finance industry.... read more

Lease Accounting Rules Add to Bank Capital Woes: Topic 842 May Cause Credit Crunch in 2019

In his final Monitor article before retirement, Bill Bosco examines how banks will be affected by the Basel Committee’s decision on international capital rules. He predicts a negative effect on worldwide economic activity in 2019 as banks address their need to increase capital which, in turn, will likely diminish lending activities.... read more

Structuring Leases Under Topic 842: Two Vital Issues to Consider

Bill Bosco raises two Topic 842 issues to consider prior to implementation — the impact of financial measures and ratios and the new rules regarding sale-leaseback accounting. He discusses several challenging situations and offers potential solutions.... read more

Basel & EFRAG Decide on New Lease Rules: Two Bad Calls for the Industry

Bill Bosco discusses two recent EFRAG and Basel Committee decisions and outlines the reasons why he believes these regulatory moves are bad for the equipment finance industry.... read more

New Accounting Rules: Implications for Vendor, Dealer and Captive Segments

Bill Bosco examines issues that vendor, dealer and captive finance segments will face when the new lease accounting rules go into effect. He discusses lessee operating lease accounting, sale leaseback accounting and sales-type lease accounting and provides strategies to deal with the changes effectively.... read more

Interim Rents Under ASU 842: Lessees & Lessors Take Note

Bill Bosco examines interim rent accounting under ASU 842, including implications for both lessees and lessors. He encourages lessors to become very familiar with the new lessee accounting rules as they will have a large impact on their lessee customers.... read more

FASB Meeting on Lease Implementation Issues: Results Are a Bad Omen

Bill Bosco reports on the FASB’s first meeting on Leases Topic 842, which concerned a consequential lessor classification issue. Although this issue results in bad accounting practices, Bosco is concerned because the board seems unwilling to resolve the issue through a revision of the standard.... read more

Leasing Companies and Sales Tax: The Six Questions Executives Need to Ask

The larger an equipment leasing company gets, the harder it becomes to keep up with sales tax compliance. ECS Financial Services Shareholder Nancy A. Geary outlines six essential questions executives need to ask ahead of time to avoid common missteps in sales and use tax processing.... read more

Taxation for Leasing Companies: A Primer for 2017

ECS Financial's Jay W. Dahl explains that leasing software is an important tool that can be used to collect the substantial amount of information needed to meet the FASB's new leasing standards. He also advises that a good understanding of GAAP and federal and state taxes rules will help alleviate the burden of taxes on your business.... read more

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Terry Mulreany
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