西方财务会计 原版课件21(88页PPT).pptx

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1、Chapter 21-1Chapter 21-2C H A P T E R 21ACCOUNTING FOR LEASESIntermediate Accounting13th EditionKieso,Weygandt,and Warfield Chapter 21-31.1.Explain the nature,economic substance,and advantages of lease transactions.Explain the nature,economic substance,and advantages of lease transactions.2.2.Descri

2、be the accounting criteria and procedures for capitalizing leases by the lessee.Describe the accounting criteria and procedures for capitalizing leases by the lessee.3.3.Contrast the operating and capitalization methods of recording leases.Contrast the operating and capitalization methods of recordi

3、ng leases.4.4.Identify the classifications of leases for the lessor.Identify the classifications of leases for the lessor.5.5.Describe the lessors accounting for direct-financing leases.Describe the lessors accounting for direct-financing leases.6.6.Identify special features of lease arrangements th

4、at cause unique accounting Identify special features of lease arrangements that cause unique accounting problems.problems.7.7.Describe the effect of residual values,guaranteed and unguaranteed,on lease Describe the effect of residual values,guaranteed and unguaranteed,on lease accounting.accounting.

5、8.8.Describe the lessors accounting for sales-type leases.Describe the lessors accounting for sales-type leases.9.9.List the disclosure requirements for leases.List the disclosure requirements for leases.Learning ObjectivesChapter 21-4Leasing Leasing EnvironmentEnvironmentWho are players?Who are pla

6、yers?Advantages of Advantages of leasingleasingConceptual nature of Conceptual nature of a leasea leaseAccounting by Accounting by LesseeLesseeAccounting by LessorAccounting by LessorSpecial Accounting Special Accounting ProblemsProblemsCapitalization Capitalization criteriacriteriaAccounting Accoun

7、ting differencesdifferencesCapital lease Capital lease methodmethodOperating methodOperating methodComparisonComparisonResidual valuesResidual valuesSales-type leasesSales-type leasesBargain-purchase Bargain-purchase optionoptionInitial direct costsInitial direct costsCurrent versus Current versus n

8、oncurrentnoncurrentDisclosureDisclosureUnresolved problemsUnresolved problemsEconomics of Economics of leasingleasingClassificationClassificationDirect-financing Direct-financing methodmethodOperating methodOperating methodAccounting for LeasesChapter 21-5Largest group of leased equipment involves:I

9、nformation technologyTransportation(trucks,aircraft,rail)ConstructionAgricultureLO 1 Explain the nature,economic substance,and advantages of lease transactions.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 lesso

10、r,for a specified period of time.The Leasing EnvironmentChapter 21-6Three general categories:Banks.Captive leasing companies.Independents.LO 1 Explain the nature,economic substance,and advantages of lease transactions.Who Are the Players?The Leasing EnvironmentChapter 21-71.100%Financing at Fixed Ra

11、tes.2.Protection Against Obsolescence.3.Flexibility.4.Less Costly Financing.5.Tax Advantages.6.Off-Balance-Sheet Financing.The Leasing EnvironmentLO 1 Explain the nature,economic substance,and advantages of lease transactions.Advantages of LeasingChapter 21-8Capitalize a lease that transfers substan

12、tially all of the benefits and risks of property ownership,provided the lease is noncancelable.Leases that do not transfer substantially all the benefits and risks of ownership are operating leases.The Leasing EnvironmentLO 1 Explain the nature,economic substance,and advantages of lease transactions

13、.Conceptual Nature of a LeaseChapter 21-9Operating LeaseOperating LeaseCapital LeaseCapital LeaseJournal Entry:Journal Entry:Rent expense Rent expense xxx xxx Cash Cash xxx xxxJournal Entry:Journal Entry:Leased equipment xxx Leased equipment xxx Lease liability xxx Lease liability xxxThe issue of ho

14、w to report leases is the case of substance versus form.Although The issue of how to report leases is the case of substance versus form.Although technically legal title may not pass,the benefits from the use of the property do.technically legal title may not pass,the benefits from the use of the pro

15、perty do.A lease that transfers substantially all of the benefits and risks of property A lease that transfers substantially all of the benefits and risks of property ownership should be capitalized(only noncancellable leases may be capitalized).ownership should be capitalized(only noncancellable le

16、ases may be capitalized).The Leasing EnvironmentLO 1 Explain the nature,economic substance,and advantages of lease transactions.Chapter 21-10If the lessee capitalizes a lease,the lessee records an asset and a liability generally equal to the present value of the rental payments.Records depreciation

17、on the leased asset.Treats the lease payments as consisting of interest and principal.Accounting by the LesseeLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Typical Journal Entries for Capitalized LeaseIllustration 21-2Illustration 21-2Chapter 21-11To reco

18、rd a lease as a capital lease,the lease must be noncancelable.One or more of four criteria must be met:1.Transfers ownership to the lessee.2.Contains a bargain-purchase option.3.Lease term is equal to or greater than 75 percent of the estimated economic life of the leased property.4.The present valu

19、e of the minimum lease payments(excluding executory costs)equals or exceeds 90 percent of the fair value of the leased property.Accounting by the LesseeLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Chapter 21-12LO 2 Describe the accounting criteria and pr

20、ocedures for capitalizing leases by the lessee.Lease AgreementLeases that DO NOT meet Leases that DO NOT meet any of the four criteria are any of the four criteria are accounted for as Operating accounted for as Operating Leases.Leases.Accounting by the LesseeIllustration 21-4Illustration 21-4Chapte

21、r 21-13Capitalization CriteriaLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeTransfer of Ownership TestNot controversial and easily implemented.Bargain-Purchase Option TestAt the inception of the lease,the difference between the opt

22、ion price and the expected fair market value must be large enough to make exercise of the option reasonably assured.Chapter 21-14Capitalization CriteriaLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeEconomic Life Test(75%Test)Lease

23、term is generally considered to be the fixed,noncancelable term of the lease.Bargain-renewal option can extend this period.At the inception of the lease,the difference between the renewal rental and the expected fair rental must be great enough to make exercise of the option to renew reasonably assu

24、red.Chapter 21-15Recovery of Investment Test(90%Test)LO 2Accounting by the LesseeMinimum Lease Payments:lMinimum rental paymentlGuaranteed residual valuelPenalty for failure to renewlBargain-purchase optionExecutory Costs:lInsurancelMaintenancelTaxesExclude from PV of Minimum Lease Payment Calculati

25、onCapitalization CriteriaChapter 21-16Accounting by the LesseeDiscount RateLessee computes the present value of the minimum lease payments using its incremental borrowing rate,with one exception.If the lessee knows the implicit interest rate computed by the lessor and it is less than the lessees inc

26、remental borrowing rate,then lessee must use the lessors rate.Recovery of Investment Test(90%Test)Capitalization CriteriaLO 2Chapter 21-17Asset and Liability Recorded at the lower of:1.present value of the minimum lease payments(excluding executory costs)or2.fair-market value of the leased asset.Ass

27、et and Liability Accounted for DifferentlyLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeChapter 21-18LO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeDepreciation Pe

28、riodIf lease transfers ownership,depreciate asset over the economic life of the asset.If lease does not transfer ownership,depreciate over the term of the lease.Asset and Liability Accounted for DifferentlyChapter 21-19LO 2 Describe the accounting criteria and procedures for capitalizing leases by t

29、he lessee.Accounting by the LesseeEffective-Interest MethodThe effective-interest method is used to allocate each lease payment between principal and interest.Asset and Liability Accounted for DifferentlyDepreciation ConceptDepreciation and the discharge of the obligation are independent accounting

30、processes.Chapter 21-20E21-1(Capital Lease with Unguaranteed Residual Value):On January 1,2011,Adams Corporation signed a 5-year noncancelable lease for a machine.The terms of the lease called for Adams to make annual payments of$9,968 at the beginning of each year,starting January 1,2011.The machin

31、e has an estimated useful life of 6 years and a$5,000 unguaranteed residual value.Adams uses the straight-line method of depreciation for all of its plant assets.Adamss incremental borrowing rate is 10%,and the Lessors implicit rate is unknown.LO 2Accounting by the LesseeInstructions(a)What type of

32、lease is this?Explain.(b)Compute the present value of the minimum lease payments.(c)Prepare all necessary journal entries for Adams for this lease through January 1,2012.Chapter 21-21E21-1:What type of lease is this?Explain.LO 2 Describe the accounting criteria and procedures for capitalizing leases

33、 by the lessee.Accounting by the LesseeCapitalization Criteria:Capitalization Criteria:1.1.Transfer of ownershipTransfer of ownership2.2.Bargain purchase optionBargain purchase option3.3.Lease term=75%of Lease term=75%of economic life of leased economic life of leased propertyproperty4.4.Present val

34、ue of minimum Present value of minimum lease payments=90%of FMV lease payments=90%of FMV of propertyof propertyNONONONOLease term 5 yrs.Economic life6 yrs.YES83.3%FMV of leased property is unknown.Capital Lease,#3Chapter 21-22E21-1:Compute present value of the minimum lease payments.LO 2 Describe th

35、e accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseePayment$9,968Present value factor(i=10%,n=5)4.16986PV of minimum lease payments$41,565 Leased Machine Under Capital Leases41,565Lease Liability 41,565Lease Liability 9,968Cash9,9681/1/11 Journal Entrie

36、s:1/1/11 Journal Entries:Chapter 21-23E21-1:Lease Amortization ScheduleLO 2 Describe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeChapter 21-24E21-1:Journal entries for Adams through Jan.1,2012.LO 2 Describe the accounting criteria and procedur

37、es for capitalizing leases by the lessee.Accounting by the LesseeDepreciation Expense8,313Accumulated DepreciationCapital Leases 8,313($41,565 5=$8,313)Interest Expense3,160Interest Payable 3,160($41,565$9,968)X.1012/31/1112/31/11Chapter 21-25E21-1:Journal entries for Adams through Jan.1,2012.LO 2 D

38、escribe the accounting criteria and procedures for capitalizing leases by the lessee.Accounting by the LesseeLease Liability6,808Interest Payable3,160Cash9,9681/1/121/1/12Chapter 21-26LO 3 Contrast the operating and capitalization methods of recording leases.Accounting by the LesseeOperating MethodT

39、he lessee assigns rent to the periods benefiting from the use of the asset and ignores,in the accounting,any commitments to make future payments.Illustration:Assume Adams accounts for it as an operating lease.Adams records this payment on January 1,2011,as follows.Rent Expense 9,968Cash 9,968Chapter

40、 21-27E21-1:Comparison of Capital Lease with Operating LeaseLO 3 Contrast the operating and capitalization methods of recording leases.Accounting by the LesseeChapter 21-281.Interest Revenue.2.Tax Incentives.3.High Residual Value.Accounting by the LessorBenefits to the LessorLO 4 Identify the classi

41、fications of leases for the lessor.Chapter 21-29A lessor determines the amount of the rental,based on the rate of return needed to justify leasing the asset.If a residual value is involved(whether guaranteed or not),the company would not have to recover as much from the lease paymentsEconomics of Le

42、asingAccounting by the LessorLO 4 Identify the classifications of leases for the lessor.Chapter 21-30E21-10(Computation of Rental):Fieval Leasing Company signs an agreement on January 1,2010,to lease equipment to Reid Company.The following information relates to this agreement.1.The term of the nonc

43、ancelable lease is 6 years with no renewal option.The equipment has an estimated economic life of 6 years.2.The cost of the asset to the lessor is$343,000.The fair value of the asset at January 1,2010,is$343,000.3.The asset will revert to the lessor at the end of the lease term at which time the ass

44、et is expected to have a residual value of$61,071,none of which is guaranteed.4.The agreement requires annual rental payments,beg.Jan.1,2010.5.Collectibility of the lease payments is reasonably predictable.There are no important uncertainties surrounding the amount of costs yet to be incurred by the

45、 lessor.Accounting by the LessorLO 4 Identify the classifications of leases for the lessor.Chapter 21-31Accounting by the LessorLO 4 Identify the classifications of leases for the lessor.E21-10(Computation of Rental):Assuming the lessor desires a 10%rate of return on its investment,calculate the amo

46、unt of the annual rental payment required.x-Chapter 21-32a.Operating leases.b.Direct-financing leases.c.Sales-type leases.Classification of Leases by the LessorAccounting by the LessorLO 4 Identify the classifications of leases for the lessor.Chapter 21-33Classification of Leases by the LessorAccoun

47、ting by the LessorLO 4 Identify the classifications of leases for the lessor.A sales-type lease involves a manufacturers or dealers profit,and a direct-financing lease does not.Illustration 21-10Illustration 21-10Chapter 21-34Classification of Leases by the LessorAccounting by the LessorLO 4 Identif

48、y the classifications of leases for the lessor.A lessor may classify a lease as an operating lease but the lessee may classify the same lease as a capital lease.Illustration 21-11Illustration 21-11Chapter 21-35In substance the financing of an asset purchase by the lessee.Direct-Financing Method(Less

49、or)Accounting by the LessorLO 5 Describe the lessors accounting for direct-financing leases.Chapter 21-36Accounting by the LessorE21-10:Prepare an amortization schedule that would be suitable for the lessor.LO 5 Describe the lessors accounting for direct-financing leases.Chapter 21-37Accounting by t

50、he LessorE21-10:Prepare all of the journal entries for the lessor for 2010 and 2011.LO 5 Describe the lessors accounting for direct-financing leases.1/1/10 Lease Receivable343,000Equipment343,0001/1/10 Cash64,400Lease Receivable64,40012/31/10 Interest Receivable 27,860Interest Revenue27,860Chapter 2