We limit our consideration of financial leasing to capital leases
, as defined in FASB Statement #13.
Last month we discussed the difference between operating leases and capital leases
. This month's column continues with an explanation of a capital lease
that includes a bargain purchase option.
Certain lease agreements that are treated as operating leases for tax purposes are classified by lessee as capital leases
for financial reporting purposes.
The purchase price is expected to be funded through a USD 70m secured term loan and USD 10.0m of assumed capital leases
The year-to-date pro forma adjustments to EBITDA include $5.2 million for the anticipated conversion of William Charles' operating leases to capital leases
and $3 million to remove corporate overhead costs that will not continue post-closing.
At end 31 December 2015, the total secured debt was USD625m, 3.2% of total gross debt and consisted primarily of capital leases
The new rule requires companies to provide a "table" that reports the timing of future cash flows associated with 1) long-term debt, 2) capital leases
, 3) operating leases, 4) purchase obligations and 5) other long-term liabilities reported on the balance sheet.
Many would argue yes, because, in reality, not all one-year-plus lease are capital leases
Dollar General, after consulting with KPMG LLP, announced that it had incorrectly classified leases made in 1997 and 1999 for 400 stores, two distribution centers and its headquarters as operating leases rather than capital leases
The transaction, estimated at $52 million, involves the sale of all of GTC's interest in Primedica for $26 million in cash, $16.5 million in Charles River common stock, and the assumption by Charles River Laboratories of all of Primedica's approximately $9.4 million of facility mortgages and long-term capital leases
Analogous to the accounting for capital leases
, the proposed accounting for nuclear decommissioning costs would result in a utility's recording an asset and a liability equal in magnitude only at the time of initial plant operation.
The most common loans from these sources are vehicle loans and capital leases
. Such loans are generally secured by tangible assets and often supplied by the captive finance companies of manufacturers of automobiles and other equipment.