Dominion Lending Centres Clearlease Reports on Off Balance Sheet Lending; leasing equipment, the change means that, for accounting purposes, all leases for plant, property and equipment would be recorded on the balance sheet for some time.
VANCOUVER, BC (July 1, 2011) Dominion Lending Centres Clearlease Reports This process determines the cost at which the lessee will carry the leased assets on its financial statements, and that amount is how much the manufacturer will record as an asset on-book.
Clearlease reported July 1, 2011 that purchase options are not included in the estimated lease payments calculation unless the lessee is reasonably assured of exercising the option. In fact, the proposed ROU method recognizes that a manufacturer that leases its equipment may not have an obligation to pay for 100% of the cost of the equipment. Thus, in cases where the lessor invests equity in the equipment, or a third party guarantees the equipment’s future value, the manufacturer will only recognize the cost of the equipment that it is obligated and likely to pay for under the lease agreement. The result is that some leases will partially shelter the balance sheet from the entire cost of owning equipment, instead reflecting only the costs associated with accessing equipment via a lease agreement.
Given what we know about the proposed changes so far, manufacturers can expect that every equipment acquisition will involve a front-end cost assessment. While this takes time and may involve more internal discussions and approvals, the costs associated with an equipment lease will be more transparent to all parties.
Benefits Remain Strong
Clearly, the proposed lease accounting changes will have a significant impact on manufacturers, particularly those considering an operating lease for manufacturing equipment. However, there are still many distinct advantages to leasing manufacturing equipment, particularly when compared to a purchase or loan. For example:
*
Leasing For Your Customers
As a manufacturer you know that leasing can be a critical tool to gain access to the equipment your company needs to grow and remain efficient. If your company manufactures finished equipment, then your customers can benefit from leasing too.
For many manufacturers, offering a point of sale financing option is an important — and highly profitable — part of the sales process because it’s a proven way for manufacturers to secure sales and other benefits, including:
o Minimize days sales outstanding — accelerate the sales cycle by eliminating the question of how the equipment will be paid for.
o Improve upgrade activity — end-of-lease disposition provides a natural contact point for next-generation and upgrade sales.
o Maintain account control — be the first to propose replacement equipment needs and use regular account servicing contact points to make constant contact with the client.
o Up-sell — more affordable payments can mean affording more equipment overall.
Some manufacturers have a captive finance company — owned by a common parent. But more often than not, the equipment finance provider is an outside partner. Now more than ever, it’s important to make sure manufacturer sales representatives and equipment finance partners who offer your clients a point-of-sale lease option are knowledgeable about leasing and the proposed lease accounting changes. It’s also a good idea to speak with your company’s equipment finance partner to make sure someone is available to answer questions and provide information for end-user customers quickly and easily.
Lower on-book debt — When the present value of the equipment is less than the cost of the asset, manufacturers will continue to see a benefit on the balance sheet. Third party equity and/or re-purchase guarantees should continue to result in a lower present value.
* Lower after-tax cost — Regardless of accounting treatment, tax leases can continue to result in the lowest after-tax cost to acquire equipment, especially when the manufacturer is not a full taxpayer. Manufacturers that have prior year tax loss credits to use or those that are Alternative Minimum Taxpayers typically can’t use the full benefits of depreciation associated with a new equipment purchase. Leasing can allow the manufacturer to trade in those benefits for an overall lower cost of financing.
* Managing upgrade/replacement cycles — Leases allow manufacturers to shift end of lease equipment value risk to the finance company. This eliminates the risk of finding a buyer for obsolete equipment. It also makes it easier to manage equipment upgrade and replacement cycles because manufacturers don’t have to wait for proceeds on the sale of old equipment to acquire new equipment.
* Conserve capital — Leasing continues to help manufacturers conserve capital lines of credit for short-term needs by allowing 100 percent financing, including delivery, installation and training.
* Speed — Leasing can allow manufacturers to respond quickly to new opportunities with minimal documentation and red tape. Many leasing companies can approve applications within an hour. And, a new equipment finance addendum (sometimes called a schedule) can be quickly added to a master lease without the need for lengthy negotiations.
* Improved Cash Forecasting — When businesses lease, they can accurately forecast the cash requirements for equipment since they know the amount and number of lease payments required.
Timing
The initial public statement about the proposed changes was published in September 2010. A three-month public comment period followed, during which the FASB and IASB accepted feedback from the public on the changes proposed. Currently, the project team is reviewing that feedback and deliberating further.
It is already evident that due to voluminous negative feedback, several aspects of the proposed changes are still in discussion. The board is expected to continue its deliberations and draft the new accounting guidance throughout 2011 and 2012. While it’s not yet clear exactly what the final lease accounting rules will be, the initial proposal is clearly an indication that change is definitely coming.
Dominion Lending Centres Clearlease Video Link: http://youtu.be/f_kk7WJa7Uk
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers Alexander Pidgeon and Rene Pidgeon.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk
VANCOUVER, BC (July 1, 2011) Dominion Lending Centres Clearlease Reports This process determines the cost at which the lessee will carry the leased assets on its financial statements, and that amount is how much the manufacturer will record as an asset on-book.
Clearlease reported July 1, 2011 that purchase options are not included in the estimated lease payments calculation unless the lessee is reasonably assured of exercising the option. In fact, the proposed ROU method recognizes that a manufacturer that leases its equipment may not have an obligation to pay for 100% of the cost of the equipment. Thus, in cases where the lessor invests equity in the equipment, or a third party guarantees the equipment’s future value, the manufacturer will only recognize the cost of the equipment that it is obligated and likely to pay for under the lease agreement. The result is that some leases will partially shelter the balance sheet from the entire cost of owning equipment, instead reflecting only the costs associated with accessing equipment via a lease agreement.
Given what we know about the proposed changes so far, manufacturers can expect that every equipment acquisition will involve a front-end cost assessment. While this takes time and may involve more internal discussions and approvals, the costs associated with an equipment lease will be more transparent to all parties.
Benefits Remain Strong
Clearly, the proposed lease accounting changes will have a significant impact on manufacturers, particularly those considering an operating lease for manufacturing equipment. However, there are still many distinct advantages to leasing manufacturing equipment, particularly when compared to a purchase or loan. For example:
*
Leasing For Your Customers
As a manufacturer you know that leasing can be a critical tool to gain access to the equipment your company needs to grow and remain efficient. If your company manufactures finished equipment, then your customers can benefit from leasing too.
For many manufacturers, offering a point of sale financing option is an important — and highly profitable — part of the sales process because it’s a proven way for manufacturers to secure sales and other benefits, including:
o Minimize days sales outstanding — accelerate the sales cycle by eliminating the question of how the equipment will be paid for.
o Improve upgrade activity — end-of-lease disposition provides a natural contact point for next-generation and upgrade sales.
o Maintain account control — be the first to propose replacement equipment needs and use regular account servicing contact points to make constant contact with the client.
o Up-sell — more affordable payments can mean affording more equipment overall.
Some manufacturers have a captive finance company — owned by a common parent. But more often than not, the equipment finance provider is an outside partner. Now more than ever, it’s important to make sure manufacturer sales representatives and equipment finance partners who offer your clients a point-of-sale lease option are knowledgeable about leasing and the proposed lease accounting changes. It’s also a good idea to speak with your company’s equipment finance partner to make sure someone is available to answer questions and provide information for end-user customers quickly and easily.
Lower on-book debt — When the present value of the equipment is less than the cost of the asset, manufacturers will continue to see a benefit on the balance sheet. Third party equity and/or re-purchase guarantees should continue to result in a lower present value.
* Lower after-tax cost — Regardless of accounting treatment, tax leases can continue to result in the lowest after-tax cost to acquire equipment, especially when the manufacturer is not a full taxpayer. Manufacturers that have prior year tax loss credits to use or those that are Alternative Minimum Taxpayers typically can’t use the full benefits of depreciation associated with a new equipment purchase. Leasing can allow the manufacturer to trade in those benefits for an overall lower cost of financing.
* Managing upgrade/replacement cycles — Leases allow manufacturers to shift end of lease equipment value risk to the finance company. This eliminates the risk of finding a buyer for obsolete equipment. It also makes it easier to manage equipment upgrade and replacement cycles because manufacturers don’t have to wait for proceeds on the sale of old equipment to acquire new equipment.
* Conserve capital — Leasing continues to help manufacturers conserve capital lines of credit for short-term needs by allowing 100 percent financing, including delivery, installation and training.
* Speed — Leasing can allow manufacturers to respond quickly to new opportunities with minimal documentation and red tape. Many leasing companies can approve applications within an hour. And, a new equipment finance addendum (sometimes called a schedule) can be quickly added to a master lease without the need for lengthy negotiations.
* Improved Cash Forecasting — When businesses lease, they can accurately forecast the cash requirements for equipment since they know the amount and number of lease payments required.
Timing
The initial public statement about the proposed changes was published in September 2010. A three-month public comment period followed, during which the FASB and IASB accepted feedback from the public on the changes proposed. Currently, the project team is reviewing that feedback and deliberating further.
It is already evident that due to voluminous negative feedback, several aspects of the proposed changes are still in discussion. The board is expected to continue its deliberations and draft the new accounting guidance throughout 2011 and 2012. While it’s not yet clear exactly what the final lease accounting rules will be, the initial proposal is clearly an indication that change is definitely coming.
Dominion Lending Centres Clearlease Video Link: http://youtu.be/f_kk7WJa7Uk
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers Alexander Pidgeon and Rene Pidgeon.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk
Dominion Lending Centres Clearlease Reports on Off Balance Sheet Lending; leasing equipment, the change means that, for accounting purposes, all leases for plant, property and equipment would be recorded on the balance sheet for some time.
VANCOUVER, BC (July 1, 2011) Dominion Lending Centres Clearlease Reports This process determines the cost at which the lessee will carry the leased assets on its financial statements, and that amount is how much the manufacturer will record as an asset on-book.
Clearlease reported July 1, 2011 that purchase options are not included in the estimated lease payments calculation unless the lessee is reasonably assured of exercising the option. In fact, the proposed ROU method recognizes that a manufacturer that leases its equipment may not have an obligation to pay for 100% of the cost of the equipment. Thus, in cases where the lessor invests equity in the equipment, or a third party guarantees the equipment’s future value, the manufacturer will only recognize the cost of the equipment that it is obligated and likely to pay for under the lease agreement. The result is that some leases will partially shelter the balance sheet from the entire cost of owning equipment, instead reflecting only the costs associated with accessing equipment via a lease agreement.
Given what we know about the proposed changes so far, manufacturers can expect that every equipment acquisition will involve a front-end cost assessment. While this takes time and may involve more internal discussions and approvals, the costs associated with an equipment lease will be more transparent to all parties.
Benefits Remain Strong
Clearly, the proposed lease accounting changes will have a significant impact on manufacturers, particularly those considering an operating lease for manufacturing equipment. However, there are still many distinct advantages to leasing manufacturing equipment, particularly when compared to a purchase or loan. For example:
*
Leasing For Your Customers
As a manufacturer you know that leasing can be a critical tool to gain access to the equipment your company needs to grow and remain efficient. If your company manufactures finished equipment, then your customers can benefit from leasing too.
For many manufacturers, offering a point of sale financing option is an important — and highly profitable — part of the sales process because it’s a proven way for manufacturers to secure sales and other benefits, including:
o Minimize days sales outstanding — accelerate the sales cycle by eliminating the question of how the equipment will be paid for.
o Improve upgrade activity — end-of-lease disposition provides a natural contact point for next-generation and upgrade sales.
o Maintain account control — be the first to propose replacement equipment needs and use regular account servicing contact points to make constant contact with the client.
o Up-sell — more affordable payments can mean affording more equipment overall.
Some manufacturers have a captive finance company — owned by a common parent. But more often than not, the equipment finance provider is an outside partner. Now more than ever, it’s important to make sure manufacturer sales representatives and equipment finance partners who offer your clients a point-of-sale lease option are knowledgeable about leasing and the proposed lease accounting changes. It’s also a good idea to speak with your company’s equipment finance partner to make sure someone is available to answer questions and provide information for end-user customers quickly and easily.
Lower on-book debt — When the present value of the equipment is less than the cost of the asset, manufacturers will continue to see a benefit on the balance sheet. Third party equity and/or re-purchase guarantees should continue to result in a lower present value.
* Lower after-tax cost — Regardless of accounting treatment, tax leases can continue to result in the lowest after-tax cost to acquire equipment, especially when the manufacturer is not a full taxpayer. Manufacturers that have prior year tax loss credits to use or those that are Alternative Minimum Taxpayers typically can’t use the full benefits of depreciation associated with a new equipment purchase. Leasing can allow the manufacturer to trade in those benefits for an overall lower cost of financing.
* Managing upgrade/replacement cycles — Leases allow manufacturers to shift end of lease equipment value risk to the finance company. This eliminates the risk of finding a buyer for obsolete equipment. It also makes it easier to manage equipment upgrade and replacement cycles because manufacturers don’t have to wait for proceeds on the sale of old equipment to acquire new equipment.
* Conserve capital — Leasing continues to help manufacturers conserve capital lines of credit for short-term needs by allowing 100 percent financing, including delivery, installation and training.
* Speed — Leasing can allow manufacturers to respond quickly to new opportunities with minimal documentation and red tape. Many leasing companies can approve applications within an hour. And, a new equipment finance addendum (sometimes called a schedule) can be quickly added to a master lease without the need for lengthy negotiations.
* Improved Cash Forecasting — When businesses lease, they can accurately forecast the cash requirements for equipment since they know the amount and number of lease payments required.
Timing
The initial public statement about the proposed changes was published in September 2010. A three-month public comment period followed, during which the FASB and IASB accepted feedback from the public on the changes proposed. Currently, the project team is reviewing that feedback and deliberating further.
It is already evident that due to voluminous negative feedback, several aspects of the proposed changes are still in discussion. The board is expected to continue its deliberations and draft the new accounting guidance throughout 2011 and 2012. While it’s not yet clear exactly what the final lease accounting rules will be, the initial proposal is clearly an indication that change is definitely coming.
Dominion Lending Centres Clearlease Video Link: http://youtu.be/f_kk7WJa7Uk
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers Alexander Pidgeon and Rene Pidgeon.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk