TAILIEUCHUNG - Lecture Intermediate accounting (16th edition): Chapter 21 - Kieso, Weygandt, Warfield

Chapter 21 - Accounting for leases. In this chapter students will be able to: Explain the nature, economic substance, and advantages of lease transactions; describe the accounting criteria and procedures for capitalizing leases by the lessee; contrast the operating and capitalization methods of recording leases. | PREVIEW OF CHAPTER 21 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Explain the nature, economic substance, and advantages of lease transactions. Describe the accounting for leases by lessees. LEARNING OBJECTIVES Describe the accounting for leases by lessors. Describe the accounting and reporting for special features of lease arrangements. After studying this chapter, you should be able to: Accounting for Leases 21 LO 1 Largest group of leased equipment involves: Information technology equipment Transportation (trucks, aircraft, rail) Construction Agriculture A lease is a contractual agreement between a lessor and a lessee, that gives the lessee the right to use specific property, owned by the lessor, for a specified period of time. THE LEASING ENVIRONMENT LO 1 LO 1 ILLUSTRATION 21-2 What Do Companies Lease? Banks Who Are the Players? Captive Leasing Companies Independents Wells Fargo Chase Citigroup PNC Caterpillar Financial Services Corp. Ford Motor Credit (Ford) IBM Global Financing Market Share 55% 14% 31% LO 1 International Lease Finance Corp. THE LEASING ENVIRONMENT 100% financing at fixed rates. Protection against obsolescence. Flexibility. Less costly financing. Tax advantages. Off-balance-sheet financing. Advantages of Leasing LO 1 THE LEASING ENVIRONMENT LO 1 As shown in our opening story, airlines use lease arrangements extensively. This results in a great deal of off-balance-sheet financing. The following chart indicates that many airlines that lease aircraft understate debt levels by a substantial amount. Airlines are not the only ones playing the off-balance-sheet game. A recent study estimates that for S&P 500 companies, off-balance-sheet lease obligations total more than one-half trillion dollars, or roughly three percent of market value. Thus, analysts must adjust reported debt levels for the effects of non-capitalized leases. WHAT’S YOUR PRINCIPLE WHAT DO THE NUMBERS MEAN? OFF-BALANCE-CHEET FINANCING A methodology for making this

• Kế toán - Kiểm toán
• Intermediate accounting
• Lecture Intermediate accounting
• Accounting for leases
• The leasing environment
• Disclosing lease data
• Financial Accounting
• Accounting process
• Accounting equation
• Accounting processing cycle
• Stock issuance
• Estimating reserves
• Liquidating dividends
• Accounting changes
• Error corrections
• Accounting choices
• Theoretical structure
• Accrual accounting
• Financial accounting environment
• Leasing environment
• Accounting by lessee
• Special accounting problems
• Cash versus accrual accounting
• International standard setting
• Accounting standards
• Accounting assists
• The challenges facing accounting
• Income taxes
• Accounting for income taxes
• Deferred tax liabilities
• Error analysis
• Accounting policy
• Accounting estimate
• Accounting policies
• Financial reporting
• Accounting information system
• Measurement issues
• Characteristics of accounting
• Capital allocation process