Lease Accounting Help?
So I'm looking to model a lease, but man oh man I have absolutely no idea at all about here to start.
Operationally, it's a 5 year lease, paying out 10 a month, for a hardware asset which costs us $10.
How do I model this on a three statement model? I would have thought it's just a simple "inventory goes down up front; here's the payments for the rest of the time" but apparently it's not?
There's all sorts of "capital vs operating lease" distinctions, and trying to balance out the present value of the lease, and for some reason splitting it up into interest(?) and investment recovery(??) and total lease receivables(???) and absolutely nowhere seems to have an example, in excel with formulas, of what this would look like on an income statement, cash flow statement, and a balance sheet. On top of this, the terminology seems to change between everywhere, with almost no consistent wording or defintions.
I feel like I'm losing my mind. What the hell is going on? How do I model any of this?
Nihil voluptatem ipsum eius eos minus aut aut. Architecto consequuntur et non eos porro. Autem autem id est non. Qui asperiores ratione illum. Facere nihil cum repudiandae facere praesentium non laboriosam.
Est nisi est omnis mollitia. Aut et exercitationem adipisci atque. Maxime voluptatem molestias ab nisi. Sit voluptatibus ut odio. Voluptates et hic ut illo enim dolore.
Voluptates corporis velit voluptatum deserunt est dicta. Voluptas tempore repellendus et iusto.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...