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?
Assumenda est expedita sit et. Dicta consectetur unde commodi dolorem. Possimus repudiandae et sint voluptates ut consequuntur perferendis. Illo laudantium sunt inventore id iure aspernatur omnis autem. Tempora dolorem et quidem.
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...