Associate of Chartered Accountant

LEASING (IAS 17/SAS 11)s IAS 17 circumscribes call for as an agreement whereby the lessor conveys to the lessee in take back for a payment or series of payments the even up to use an asset for an agreed period of time. SAS 5 define renting as a contractual agreement amongst an owner ( the lessor) and another party ( the lessee) which conveys to the lessee, the right to use the undertake asset for an agreed period of time in return for a consideration, usually periodic payment called rent. A lease contract conveys a right to a lessee to use the lease property, in the language of the conceptual frameworks, the lessee controls the future frugal benefits corporeal in the contract property for the period of the lease term. Similarly, the lease contract establishes an obligation on the lessee to sacrifice future economical benefits to an external party in payment for the use of leased property. ADVANTAGE OF LEASING 1.Cash Flow Management; - if cash is use to purchase assets, such cash will not be available for the normal operating activities of a social club. Therefore, leasing help the company to manage its cash outflow and cash inflow. 2.Conservation Of seat of government;-lines of credit may be kept open and may be used for purposes where finance might not be available easily 3.

Continuity;- the lease agreement is itself a quick temper of credit that cannot easily be withdrawn or end due to external factors, unlike an overdraft that can be called in by the lender 4.Flexibility of the Asset Base;-the asset floor can be more easily expanded and contracted. In addition, the lease payments can be structured to match the income excogitation of the lessee 5.Off Balance Sheet Financing;- leasing provides the lessee with the possibility of get through balance sheet financing, whereby a company has the use of an economic resource that does not appear in the balance sheet, with the check omission of the liability. TYPES OF LEASING In both IAS 17 and SAS 11, there are... If you ask to get a full essay, order it on our website: Orderessay

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