Financial lease

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An improved LGD model for the hire purchase and financial lease portfolio of Volkswagen Bank GmbH Branch NL

An improved LGD model for the hire purchase and financial lease portfolio of Volkswagen Bank GmbH Branch NL

The research will be limited to the financial lease and hire purchase portfolios of Volkswagen Bank. These portfolios include retail exposures to companies and private clients respectively in The Netherlands. The model that will be studied in this research is the LGD model for those two portfolios, the main focus is on improving this model. Related issues such as the Best Estimate LGD model, determining the conservative margin, allocation of direct and indirect costs and LGD downturn factor will be looked at but emphasis is on finding improvements for the LGD model. 1.1.4 Research objective
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Backtesting the PD model for the financial lease and hire purchase portfolio of Volkswagen Bank GmbH branch NL

Backtesting the PD model for the financial lease and hire purchase portfolio of Volkswagen Bank GmbH branch NL

Volkswagen Bank the Netherlands provides financial services for the automotive consumer, in terms of financing, insuring and leasing. The portfolio mainly consists of financial lease (FL) contracts for business clients and hire purchase (HP) contracts for private clients; roughly << confdidential >>%, based on the contract snapshot of January 2009. The other two types of contracts are personal loans and resolving credits, however, for these models a standardized approach is used concerning credit risk. Regarding the FL and HP contracts, the risk management department prefers to use the internal rating approach (IRB) for modelling credit risk. An overview is given in figure 3 (SSC Risk Management, 2008, p. 17).
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The lease financing in Bangladesh: a satisfied progress in business and industrialization

The lease financing in Bangladesh: a satisfied progress in business and industrialization

Long-term, non-cancelable lease contracts are known as financial leases. It combines some of the benefits of leasing with those of ownership. Hence a finance lease is structured as a non-cancelable agreement, where the leasing company buys the equipment which the client has chosen and the client uses the equipment for a significant period of its useful life. Financial leases also are called full-payout leases because payments during the lease term amortize the lessor’s total purchase costs with a residual value of up to 5% of the original gaining price. Sometimes the present value of the minimum lease payment equals or exceeds 90% of the fair value of the leased property. Most financial leases are direct leases. The lessor buys the asset identified by the lessee from the manufacturer and signs a contract to lease it out to the lessee. Office building, multipurpose industrial building and even complete shopping centers are frequently financed with this method. Most lease backs are on a net-net basis, which means that the lessee pay all maintenance expense, property taxes, insurance and lease payment (Hamilton 1992, John 1964, Khanam 1995, Islam 1999, Bass and Henderson 2000). A financial lease agreement may provide for renewable of contract or purchase the asset by the lessee after the contract expires.
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Impact of New Standard “IFRS 16 Leases” on Statement of Financial Position and Key Ratios: A Case Study on an Airline Company in Turkey

Impact of New Standard “IFRS 16 Leases” on Statement of Financial Position and Key Ratios: A Case Study on an Airline Company in Turkey

As it could be understood from Table 4, it has been observed that the payments of the Company regarding its non-cancellable operating lease liabilities in the financial statement footnotes of the operating reports of the company have not been submitted yearly and the lease liabilities have been grouped as 0-1 year, 1-5 years and more than 5 years. It is necessary to know the amount and period of the operating leases of the company as of years for the purpose of being able to calculate the present value of the operating lease liabilities. Because the operating lease liabilities of the company cannot be reached yearly, it has been assumed that the payments between 1-5 years are equal (1,311,457,028/5=262,291,406) and regarding the payments in more than 5 years, the liabilities of the remaining two years are also equal (327,309,414/2=163,654,707) because the operational lease contracts of the company are utmost 8 years. Another assumption regarding the calculation of its present value is the interest rate. According to IFRS 16, the lessee should determine lease liabilities of the unpaid lease payments at the beginning date with their present value. If the implicit interest rate used in the financial lease of the lease payments could be detected, it should be discounted with this ratio. If this ratio cannot be detected, it could use the alternative liability interest ratio of the company (IFRS 16: par. 22-29). Because the implicit interest rate and alternative liability interest rate of the company cannot be detected, the interest rate has been considered as 10%. The similar rate has been used in similar studies (Beattie et.al., 1998; Imhoff et.al., 1991; Duke et.al., 2009; Wong and Joshi, 2015). The present value of the operating leases of Pegasus Airline Company are presented in Table 5.
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Relation between lease finance and purchase

Relation between lease finance and purchase

Long-term, non-cancelable lease contracts are known as financial leases. It combines some of the benefits of leasing with those of ownership. Hence a finance lease is structured as a non-cancelable agreement, where the leasing company buys the equipment which the client has chosen and the client uses the equipment for a significant period of its useful life. Financial leases also are called full-payout leases because payments during the lease term amortize the lessor’s total purchase costs with a residual value of up to 5% of the original gaining price. Sometimes the present value of the minimum lease payment equals or exceeds 90% of the fair value of the leased property. Most financial leases are direct leases. The lessor buys the asset identified by the lessee from the manufacturer and signs a contract to lease it out to the lessee. Office building, multipurpose industrial building and even complete shopping centers are frequently financed with this method. Most lease backs are on a net-net basis, which means that the lessee pay all maintenance expense, property taxes, insurance and lease payment (Hamilton 1992, John 1964, Khanam 1995, Islam 1999, Bass and Henderson 2000). A financial lease agreement may provide for renewable of contract or purchase the asset by the lessee after the contract expires.
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Application of new approaches in recognizing leases on the part of the lessee in the selected companies in the Czech Republic

Application of new approaches in recognizing leases on the part of the lessee in the selected companies in the Czech Republic

next question concerned the measurement ap- praisal of the right-of-use assets. 95.47% respondents are inclined to use the historical cost, which would approximately correspond to the value to pay the obligations, two entities failed to answer this ques- tion. only 3.52% respondents would insist on the necessity to use the fair value of this right despite the difficulty of the practical determination of this value. regarding the subsequent treatment of the identified obligation and property, the iASB and FASB pressed up for two possible approaches to the subsequent treatment of the assets and the obligation since the beginning. The first approach would distinguish leases into those, which in fact represent the purchase of assets – for those, the use of the currently applicable method of financial lease reporting in accordance with the international standards is anticipated, and to operational lease. For this lease type, the asset and obligation are considered highly interconnected quantities, which should, therefore, be always rec- ognized in the same value. Under the operational lease, the asset and obligation are recognized in the value of the discounted rentals paid for the term of the lease at the beginning of the lease term using the incremental borrowing rate of the lessee. The obliga- tion and the right-of-use as interconnected quanti- ties are recognized for the whole period in the same value. This original proposal of the iASB basically results in such a method of recording in which the right-of-use and the obligation are decreased using the incremental borrowing rate of the lessee. The obligation and the right-to-use are being depreciated by the same amount. The interest, unlike the pay- ments of rental, is not charged to the financial costs, the costs (it corresponds to the whole paid amount of the rental) thus show a steady course during the whole term of lease. indirectly we can derive from the iASB’s proposal that the depreciation of the asset and obligation in the same amount would affect the profit and loss statement in the same amount. in ac- cordance with the iAS 1 philosophy, this should be a gain (decrease of an obligation) and losses (reduction of an asset). For me personally, the disadvantages of this approach are the following:
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“Thank heavens for the lease” : Histories of shared ownership

“Thank heavens for the lease” : Histories of shared ownership

A further problem concerned the period of study. The lease had stabilised in form by the 1970s, so that its core terms – which would doubtless be meaningless to lay persons – were generally well- known by professionals. In any event, it was its adoption and adaptation as the foundation for ‘shared ownership’ that was relevant to this study. Then, we might have traced shared ownership back to its previous incarnations, under different labels, and through its translations. But we found that Birmingham had been advocating its scheme from about 21 st September 1973 (Birmingham CC Housing Committee Report). This seemed to be the date at which ‘shared ownership’ emerged as a distinct policy solution, although we recognised that its genesis might have occurred elsewhere Indeed, one could just as easily have started with the publication of a “little pamphlet” by John Stanley, shortly after he was elected to Parliament in April 1974, and endorsed by Margaret Thatcher, then shadow Minister for the Environment: Shared Purchase: A New Route to Home- Ownership (Stanley, 1974). The significance of this little-known publication was its translation into national policy by the policy entrepreneur – John Stanley himself – when taking office as the first housing Minister in the first Thatcher government from 1979.
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The Changed (and Changing?) Uniform Commercial Code

The Changed (and Changing?) Uniform Commercial Code

One may still ask whether the rules that place a good deal of the risk of intermediary failure on the customer had to be structured thus. Granting the considerable force of Professor Rogers’ arguments in their favor, the rules could still have had, in essence, a consumer exception. It would not have to protect repo financers, margin cus- tomers, or the like, and it would not have to affect the rules that pro- tect buyers of entitlements. Rather, revised Article 8 could have given individual entitlement holders priority over secured creditors of their intermediaries as to any entitlements pledged to the secured creditors. After all, the intermediary is not supposed to borrow on the basis of the entitlements held by others, and one may fairly assume that most of an intermediary’s financial assets are held on behalf of its customers. Under these circumstances, why should a lender, pre- sumably knowing these facts, be given priority in assets which it should know the intermediary may not pledge? 311 This problem is es-
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Study of the behavior pattern, carbon reduction effect and business costs of electric motorcycles on island

Study of the behavior pattern, carbon reduction effect and business costs of electric motorcycles on island

Global warming and climate change have led to extreme changes in climatic conditions in recent years. The Taiwan government designates the construction of the Kinmen County as low carbon islands, to promote the operation of 100 electric motorcycles and battery demonstration. This study combined with island tourism, after boarding the island, visitors can rent electric motorcycles from the passenger service center and coordinate with the island tour map to show the location of the battery exchange points, so as to facilitate the search. During the operation, the amount of electric motorcycle lease is 15,551 times, the total mileage of motor vehicle is 284,404 km, the number of battery exchange is 622 times, the lease income is about NT$900,000. To reduce carbon and economic benefits of the assessment, compared to the motorcycles (50 c.c), electric motorcycles (EM 100) can reduce the carbon emissions by 8,726 kg, reducing energy costs of NT$422,594.
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The Use of Financial and Credit Tools to Minimize the Risks in the Organization of Production

The Use of Financial and Credit Tools to Minimize the Risks in the Organization of Production

There are different methods of calculation of lease payments. We have proposed a new effective method for the calculation of lease payments based on the Guidelines (1996), but it allows calculating lease payments in various forms of leasing (import leasing, revolving leasing, leveraged leasing) and taking into account indicators not considered previously, such as insurance of leasing property in the period of its delivery, financial risk insurance, exchange risk insurance. Besides, the proprietary methodology of calculation of the lease payment suggested calculating the payment amount using a floating rate of interest.
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IAS 17 Leases   A Closer Look

IAS 17 Leases A Closer Look

In classifying a lease of land and buildings, land and buildings elements would normally be separately. The minimum lease payments are allocated between the land and buildings elements in proportion to their relative fair values. The land element is normally classified as an operating lease unless title passes to the lessee at the end of the lease term. The buildings element is classified as an operating or finance lease by applying the classification criteria in IAS 17. However, separate measurement of the land and buildings elements is not required if the lessee's interest in both land and buildings is classified as an investment property in accordance with IAS 40 and the fair value model is adopted.
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Lease Financing of Bangladesh: A Descriptive Analysis

Lease Financing of Bangladesh: A Descriptive Analysis

For the last three years, the leasing industry experienced average growth rate of around 30 percent, although the market penetration remains very low range of 3-4 percent of medium term financing. With the new leasing companies and active participation of commercial banks in the leasing business, the overall competition level has increased substantially during the year. Withdrawal of initial depreciation allowance on asset in 1998 continues to adversely affect the profitability of leasing companies. However, among visible non-functioning of development financial institutions (DFIs), ailing capital market and lack of interest of commercial banks in term financing, the leasing industry remains only vibrant financial intermediaries for the medium term financing with less than 5.0 percent non-performing loans.
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Sale and Lease of Indian Water Rights

Sale and Lease of Indian Water Rights

[I]t seems clear that water was intended to be permanently reserved for the tracts which the Indians chose not to relinquish, and that neither the actual leasing[r]

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IFRS 16 and its Impacts on Aviation Industry

IFRS 16 and its Impacts on Aviation Industry

of 1995. Kilpatrick and Wilburn (2006) replicated the study of Imhoff et al. (1991) and used the nine companies from the study in 2004 to re-examine the lease capitalization effect in the financial statements. Lipe and Wright (1991) selected seven American companies for their study, where the ratio of the cash flow from operating leases to the total assets of the companies was very high, and these companies were subsequently supplemented by another seven companies, where the ratio was relatively low. For this reason, there are 2 results in the summary table (Tab. XV) The research of Beattie et al. (1998) focused on 232 industrial and commercial companies listed in U.K. using capitalization model based on Imhoff et al.‘s model from the year 1991. De Villiers a Middelberg (2013) chose for their research 40 top Johannesburg Stock Exchange listed companies. The following table concludes author’s results and the results of the mentioned researches.
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Lease Based Consistency Scheme in the Web Environment

Lease Based Consistency Scheme in the Web Environment

in lease duration, notification is processed by three methods, which are invalidation, update and competitive update. To determine which notification method should be used to maintain the consistency is a critical thing to reduce the message overhead. It is not easily manageable problem because it is based on the lease mechanism. Early studies[3,4] showed analytical comparisons of invalidation, update and com- petitive update without the lease by using the segment model. We consider the cost of messages as the cost metric for the invalidation, update and competitive model. We assume that particular page P at the proxy cache is accessed by clients. These ac- cesses can be partitioned into segments. A Segment is defined as a sequence of re- mote updates between two consecutive local accesses by a node. A new segment begins with the first access by a client following an update to the page by the server. Segments are defined from the point of view of each node[4]. Fig.3 shows how the segment is composed.
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Zoning-Rural America: A New Lease on Life

Zoning-Rural America: A New Lease on Life

Ever since the Supreme Court of the United States decided Eu- clid v. Ambler, 8 zoning regulations have been sustained if they were reasonable and had a substantial [r]

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Paper on the Accounting Advisory Forum - Accounting for lease contracts

Paper on the Accounting Advisory Forum - Accounting for lease contracts

Operatin~ Finance leases lease By lessor as an asset Asset as annuity-loan By lessee in the notes Assets capitalised in balance sheet at fair value purchase price calculation or value on[r]

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The Sisyphean Task of Interpreting Mineral Deeds and Leases: An Encyclopedia of Canons of Construction [reprint, first published 1993]

The Sisyphean Task of Interpreting Mineral Deeds and Leases: An Encyclopedia of Canons of Construction [reprint, first published 1993]

125. Id. The court cites Kokernot v. Caldwell, 231 S.W.2d 528, 531–32 (Tex. Civ. App.— Dallas 1950, writ ref’d) as the basis of the granting clause prevails canon. Kokernot did not involve conflicting fractional grants, but involved conflicting temporal limits between the granting and subject-to clauses. The granting clause created a fixed term mineral interest of 20 years while the subject-to clause only referred to the terms of the existing lease. 231 S.W.2d at 530–31. The grantee alleged that the subject-to clause was a transfer of an estate, which was to last as long as the lease, while the grantor alleged that the interest was to terminate after 20 years. See id. at 531. Because the dispute was between the granting and subject-to clauses, the court could have relied on Hoffman and found that the granting clause created a term for years mineral estate in the grantor’s possibility of reverter, and the subject-to clause created a second interest that was to last as long as the existing lease. But, instead, the court relied on several other canons, including the irreconcilable conflicts canon, to give preemptive effect to the granting clause limitation of 20 years. See 671 S.W.2d at 873–74. The court acknowledged that two separate estates could be created in a single mineral deed but found that a reasonable construction of the language of this deed would not support such an interpretation. See id. at 873. But cf. Acklin v. Fuqua, 193 S.W.2d 297 (Tex. Civ. App.— Amarillo 1946, writ ref’d n.r.e.) (stating that two separate and distinct mineral estates can be conveyed by one instrument to subsist during and beyond the life of an existing lease, and a royalty to be due and payable under the lease).
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Uncovering the Transnational Networks, Organisational Techniques and State-Corporate Ties Behind Grand Corruption: Building an Investigative Methodology

Uncovering the Transnational Networks, Organisational Techniques and State-Corporate Ties Behind Grand Corruption: Building an Investigative Methodology

The Papua New Guinea National Gazette (2000) reveals that, when the lease was issued in April 1998, the Paga Hill land was still zoned open space; the lease, therefore, was issued in [r]

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"OF STRAWS AND CAMEL'S BACKS" — FUNDAMENTAL BREACH OF LEASE

"OF STRAWS AND CAMEL'S BACKS" — FUNDAMENTAL BREACH OF LEASE

said, the covenant to pay rent in advance at specified times would not be a fundamental or essential term having the effect that any failure, however slight, to make payment at specifi[r]

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