Advanced Workshop Overview
The Advanced Principles of Leasing Workshop is designed to continue the learning started by the Original Principles workshop. The course is for mid-level personnel who wish to have a greater understanding of how leasing is effected by the different phases of the business.
The rules on lease classification and income recognition are presented by using a base case lease and following it through the GAAP accounting requirements. How lessors account for changes during a lease term including early terminations, early buy-outs, and assumptions are discussed to familiarize attendees with the correct accounting requirements. Instructors discuss the proper entries for sale-lease-backs, terminations to renewals, renewals effect on residuals and lessor participant requirements. Current thoughts on how the accounting profession views leasing and what type of changes may be in our future is also discussed.
Structuring and Pricing
The different yield assumptions (IRR, MISF, ROA, ROE) and how they affect the pricing of a transaction is reviewed. Structured leases and how the differences arise between the book approach and the tax approach to the cash flow records is also presented. A complete list of all the modern, end-of-lease options and how they affect cash, book, tax, and legal are reviewed to better understand how the work flow is affected by these decisions. A complete lease vs. buy analysis is also presented.
Review of Federal Income Tax requirements and Qualifying a lease for Article 2A Purposes
A review of the current requirements of the IRS to pass a true lease federal income tax test, plus a complete review of the definition of a lease for Article 2A treatment and the requirements for facing a federal bankruptcy court is presented.
Pricing and Paying Off a Tax Lease
A true tax lease will be priced using a computer-based pricing program with all of the reports in order to examine how the yield is calculated and to understand how an early termination is effected by the tax consequences.
Lease proposals and commitment letters are examined to illustrate how the sales process communicates with the lessee to create a competitive solution that responds to the lessee's needs.
Unique Types of Leases
Leases are presented that do not fit the standard risks; (e.g., software, hazardous material, fixtures, and limited use property), with a particular focus on the legal, tax, and accounting issues associated with these leases. This section also includes a discussion of subsidy programs and the current difficulties in leasing transportation equipment.
Current and future issues that will impact the leasing product such as Usury, the review of SFAS #13 Accounting Rules for Leasing, sales tax changes with the Streamline Sales Tax Compliance, and the future of Basel II.
Residuals and Asset Management
This section discusses how to assume and determine a proper residual. Impact on earnings and yield is also examined here. Ways to protect the residual and manage the assets within the portfolio are reviewed. The many ways to evaluate equipment is discussed, including the proper manner to present the different values.
A 60-question test will be administrated and reviewed on the last morning. The test provides a review of all the principles presented during the workshop.
Please note: in order to receive a certificate of completion for this workshop, attendees are required to complete this test and the workshop evaluation form.