Lecture Business finance (9/e) - Chapter 16: Leasing and other equipment finance

Chapter 16 Leasing and Other Equipment Finance Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 16–1 Prepared by Dr Buly Cardak Learning Objectives • Explain the main features of finance leases and operating leases. • Understand the reasons for leveraged leases and cross-border leases. • Outline the accounting and tax treatment of leases in Australia. • Calculate rentals for a finance lease. • Evaluate a finance lease from the lessee’s viewpoint. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 16–2 Prepared by Dr Buly Cardak Learning Objectives (cont.) • Evaluate an operating lease from the lessee’s viewpoint. • Critically evaluate the suggested advantages of leasing. • Explain the factors that can influence leasing policy. • Outline the main features of chattel mortgages and hire-purchase agreements. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 16–3 Prepared by Dr Buly Cardak Introduction • Leasing is distinguished from most other forms of finance by the fact that the financier (the lessor) is the legal owner of the leased asset. • The asset user (the lessee) obtains the right to use the asset in return for periodic payments (lease rentals) to the lessor. • Equipment finance: a general term that encompasses leasing hire-purchase and chattel mortgages. • Recent figures from the Australian Equipment Lessors Association (2004) estimate around 20% of all new capital equipment acquired by Australian businesses is leased. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 16–4 Prepared by Dr Buly Cardak Operating Leases • Essentially a rental agreement. • Cancellable by the lessee, at little or no cost. • Normally only for a short period, which is considerably less than the useful life of the leased asset. • Risks of ownership borne by the lessor. • Maintenance lease: operating lease where the lessor is responsible for all maintenance and service of the leased asset. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 16–5 Prepared by Dr Buly Cardak ... - tailieumienphi.vn