OPERATING LEASING
The lessor (leasing company) is the beneficial owner. It reports the assets on its balance sheet and depreciates them. The lessee (customer) reports its incoming invoices as tax-deductible expenses in its profit & loss account.
The main features of the lease are:
- The residual value shall not be below 16 %, which is the minimum calculated residual value.
- Monthly lease instalments are invoiced plus VAT.
|
Benefits for you:
|
Lease specifications:
|
- No economic risk
- Improvement of your balance sheet ratios by off-balance financing
- Budgetary operating costs
- Option to buy the assets at the end of the lease term, without obligation
|
- Lease term: 12 months to 120 months
- Minimum amount: € 100.000,-
- Currency: Euros
|
IAS 17 defines operating leasing as leases that are not financial leases. They are treated like rental agreements, by which the lessor capitalizes and depreciates the objects in his balance sheet; the payments are treated as income/expenses. To distinguish operating leasing from financial leasing, IAS 17 provides a number of criteria. The distinction according to national regulations varies from country to country. Operating leases are generally used for short term leases of equipment; the lessee can obtain the use of equipment for just a fraction of the useful life of the asset.
Sale and Operational Lease Back (with or without right to sublease)
An arrangement whereby SGEF purchases equipment from a lessor (manufacturer or distributor) or from a company owning and using it; the equipment is then leased back to the original owner, which continues to use it or leases it on.