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TimeValue Software Blog

Lease Accounting Regulations

By Martel Pellerin

The new Lease Accounting Regulations (ASC 842) require organizations that lease assets, or “Lessees” to recognize the assets and liabilities of those leases on their balance sheets. Most leases, including most operating leases, are now capitalized on the balance sheet.

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GASB 87

By Martel Pellerin

The Government Accounting Standards Board (GASB) issued Statement No. 87, Leases. This replaces the previous lease accounting methodology and establishes a single model for lease accounting based on the foundational principle that leases are a financing of the right to use (RTU) an underlying asset. Following are highlights from GASB Statement No. 87 – Leases (ca.gov).

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Imputed Interest Rate

By Martel Pellerin

The imputed interest rate is an unstated interest rate and it can cover many different scenarios. To calculate an imputed interest rate, you need to input the actual cash flows and then you can solve for the interest rate.

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Lease Pricing

By Martel Pellerin

Pricing a lease to produce a win/win proposal may take a little creativity. You may need the brilliant lease structure to win a deal and the right solution to make it happen.

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Calculating Lease Payment Factors

By Martel Pellerin

A lease rate factor is the regular lease payment as a percent of the total cost of the leased equipment. Stated another way, if you multiply the lease rate factor by the cost of the leased equipment, you will determine the regular payment amount. The lease rate factor is a simplistic way of getting the payments but it is not that simple.

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