Welcome to Competition Realty Virginia Real Estate Broker ~Virginia Beach Norfolk Chesapeake ~ Competition Realty!

     Hurricane
Currently there is a problem with headlines from this site

     Virginia Roads
HELPcom.NET Road Conditions

Road Conditions

Travel Center

PDF Maps


     Purchasing ~ Mortgages ~ FAQ
Buyer ~ Mortgage ~ FAQVirginia Beach, Norfolk, Chesapeake, Virginia Real Estate Broker: Rentals ~ Sales, Commercial, Residential ~ Competition Realty LLC

Mortgage - FAQ
Rent vs Buy
Application
Appraisals
Bankruptcy
Calculators
Credit Rating
Credit Repots Online
Commercial
Cost of Living Comps
Downpayment
FHA
FHA Loan Benefits
Interest Rates
Pre-qualification
Tax Benefits
VA


     Conventions

Conventions
User Agreement
Disclaimer
Disclosure
Operational Philosophy
Privacy Policy
Welcome To One of The Best Sites on The Web

Competition Realty - Real Estate Professionals


     Random Headlines

Acerage Property 4 Sale
[ Acerage Property 4 Sale ]


     Buyer ~ Seller Checklist
Buyer ~ Seller Checklist Virginia Beach, Norfolk, Chesapeake, Virginia Real Estate Broker: Rentals ~ Sales, Commercial, Residential ~ Competition Realty LLC Buyers and Sellers 
Below Is Some of
What You Need to
Know Before Closing

Closing Check List
Survey
Warranty
Title Insurance 

 


     Public Services
Virginia Beach, Norfolk, Chesapeake, Virginia Real Estate Broker: Rentals ~ Sales, Commercial, Residential ~ Competition Realty LLC

SERVICES
Dead Beat Parents
Megan's Law
News Sources


     WVEC TV 13
Currently there is a problem with headlines from this site

     Legal Resource
·Commonwealth Transportation Board
·Virginia General Assembly Legislative Update 2-22-2017
·Virginia General Assembly Legislative Update 2-20-2017
·Kevin Duffan, candidate for the 2nd Judicial District, JDR Court
·Virginia General Assembly Legislative Update 2-17-2017
·Department of Environmental Quality Small Renewable Energy Project Henrico Count
·Virginia General Assembly Legislative Update 2-16-2017
· Water Quality Certification of Norfolk District Army Corps of Engineers 2017 Na
·Virginia General Assembly Legislative Update 2-15-2017
·Virginia General Assembly Legislative Update 2-14-2017

read more...

     Computers
· Traffic Overload

MAINTENANCE

Traffic Overload

"We work on mirroring PDF file for download"

" target="new">Traffic Overload


read more...

     Disclosures

Conventions
User Agreement
Disclaimer
Disclosure
Operational Philosophy
Privacy Policy
 Welcome To One of The Best Sites on The Web


 Leveraged lease accounting may be on its last legs

Tax Issues

Leveraged lease accounting may be on its last legs

Summary: The FASB wants to issue a final standard from proposed ASU No. 1850-100 and converge the accounting for lease contracts with U.S. GAAP and IFRS. Before it does, it has to decide whether the principle for leveraged lease contracts is worth keeping in the final standard.

The FASB is set to decide at its July 13, 2011, meeting whether to scrap an accounting method for lease contracts that was once common in the U.S. but has become less prevalent. Overseas, the practice was rarely seen. Leveraged lease accounting, as it is known under U.S. GAAP, does not exist under IFRS and is used primarily when a company finances the purchase of a large asset such as an airplane or power plant before leasing it to another business.

The companies that use leveraging call it a solid financial tool that can help present investments in a leveraged lease on a net basis. With leveraging, the lessor's after-tax net income is lifted through an accelerated depreciation schedule or investment credits. The savings are passed on to the lessee.



“By putting out a relatively small portion of cash to make an investment but getting all the tax benefits from it, [lessors] are able to basically get a highly levered return out of the transaction,” said John Bober, managing director, structuring group GE Energy Financial Services and an alternate member of the Financial Executives International's (FEI) committee on corporate reporting. “Because of that, if you look at just the cash they’re putting out, they’re actually getting returns that are maybe [one to two percentage] points above what they were going to get if they had to put all the funds out themselves,” Bober said.

The accounting method is especially helpful to renewable energy companies, where investors can take advantage of several tax breaks.

The FASB is reviewing the leveraged lease issue after planning to drop the accounting method from U.S. GAAP in proposed Accounting Standards Update (ASU) No. 1850-100, Leases (Topic 450). The draft guidance aims to end a longstanding practice under U.S. GAAP that leaves most operating leases off company balance sheets and converge lease accounting in this country with IFRS.

The proposal offers no special provisions for leveraged leasing, nor does it provide transition guidance allowing for grandfathering of leveraged leases.

At a June 29 education session, staff members told the board that leveraged leases should be left out of the final standard. One of the project's goals is to eliminate the distinctions—and potential confusion—among different types of leases. Eliminating the special accounting “would result in comparability across all lessor financial statements as well as in financial leases guidance that is converged,” the FASB staff wrote in a memo to the board.

At the education session, board members and the staff discussed the grandfathering idea, but that didn’t gain traction with members. “If we were to decide to grandfather, make an exception of some sort... other than just saying, ‘Well, it’s been done, it’s worked well,’ is there any conceptual justification for this treatment?” FASB member Daryl Buck asked.

FASB member Lawrence Smith said he believed leveraged lease accounting as it currently stands does indeed properly reflect the economics of the transactions, but “the point is, there is a lot of other tax incentive transactions that we don’t do separate accounting for.”

Proponents of keeping leveraged lease accounting in U.S. GAAP say lenders may no longer be willing to provide capital for businesses that cannot afford such large assets because they no longer would be allowed to present their investment in the lease on a net basis and recognize income on an after-tax basis, according to a staff memo.

Already some investment money is drying up, Bober said, because investors are worried about the pending changes to lease accounting although they are still only at the proposal stage. “For certain transactions that would be very well suited—renewable energy such as solar and wind, because they have heavy tax benefits—those transactions are not happening,” he said.

Some comment letters on the exposure draft expressed support for leaving the leveraged lease principle intact. For example, FEI argued that because leveraged leases are largely found in the U.S., there would be no hinderance to convergence. The “impacts of changing the current accounting for leveraged leases is primarily a domestic issue,” FEI wrote in a December 14, 2010, letter.

Source: WG&L Accounting & Compliance Alert on Checkpoint 7/8/2011




 
     Login
Nickname

Password

Don't have an account yet? You can create one. As a registered user you have some advantages like theme manager, comments configuration and post comments with your name.

     Related Links
· More about Tax Issues
· News by david


Most read story about Tax Issues:
Leveraged lease accounting may be on its last legs


     Article Rating
Average Score: 4
Votes: 1


Please take a second and vote for this article:

Excellent
Very Good
Good
Regular
Bad


     Options

 Printer Friendly Printer Friendly

 Send to a Friend Send to a Friend


Associated Topics

Tax Issues

Sorry, Comments are not available for this article.




 
Click Here to Send Us E-Mail

For more information please contact: David Lindsey

Competition Realty™ LLC
5368 Providence Road
Virginia Beach , Virginia , 23467-5002
USA
Phone: (757) 424-5102
Fax: (757) 282 -2424
http://www.realtycom.net

top 10% awardAwarded Top 10% in the Nation for Consumer Satisfaction by the Internet Consumer Group
more info

All logos and trademarks in this site are property of their respective owner. The comments are property of their posters, all the rest © 1997 - 2016, 2004,2005, 2006 DML/CRLLC

CLICK HERE TO SEE COMPETITION REALTY'S EQUAL OPPORTUNITY HOUSING POLICY
This Page Maintained By 

WEB HOSTING SERVICES www.webhostingusa.us
Web Services By
 Web Hosting  USA, LC
 WWW.WEBHOSTINGUSA.US





Google
  Search www.realtycom.net Search helpcom.net Search WWW

Serving
Tidewater | Hampton Roads | Virginia | Southeastern Virginia |North Carolina | Virginia Beach| Chesapeake | Damn Neck | Franklin | Gloucester | James City | Isle of Wight | Langley | Little Creek | Mathews | Middlesex | Norfolk | Northwest | Oceana  | Portsmouth | Poquoson | Newport News | Hampton | Williamsburg | Yorktown | Smithfield | Southampton | Suffolk | Surry  | York | Yorktown | Camp Perry | Camp Pendleton | Craney Island | Fort Eustis | Fort Monroe | Fort Story | Naval Base Norfolk | Norfolk Naval Shipyard | NASA | NATO | NOAA  | Pongo Field | Saint Julian | Thomas Jefferson National Accelerator | Northwest Radio | US Naval Hospital  | US Navy Regional Medical Center  | Fentress Airfield | Saint Helena | Scott Center  | Naval Air Station Virginia Beach  |  Naval Air Station Norfolk  |  Armed Forces Staff College  |  Norfolk State University  |  Old Dominion University  |  Virginia Wesleyan College  |  Christopher Newport University  |  University of Southern Virginia  | College William and Mary  |  Marshall~Wythe School of Law  |  Regent University

You can syndicate our news using the file backend.php or ultramode.txt

We're Listed On The Virginia Beach Business List
Copyright © MIXCIXVIII by CR
Page Generation: 0.35 Seconds