ACCOUNTING AND TAXATION OF LEASING CONTRACTS

PART 1

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Covaliov Georgeta,

auditor, CIPA

LEGAL FRAMEWORK FOR REGULATING LEASING AND LEASING OPERATIONS

Art. 1314 Leasing contract

  1. Through the leasing contract, one party (lessor) undertakes to ensure to the other party (lessee), within an agreed term exceeding 1 year (the leasing term), the possession and use of an asset purchased by the lessor, as well as to grant the lessee the option to acquire ownership of the asset, to extend the leasing term or to return the asset at the end of the leasing term, and the lessee undertakes to make the agreed periodic payments (leasing installments).
  2. The leasing rate represents the periodic payment composed of a share of the entry value of the asset and the leasing interest.
  3. The entry value of the asset is composed of the cost at which the asset was purchased by the lessor, including the duties and taxes provided for by law (except for those that, according to the law, are to be returned to the lessor), as well as, as the case may be, any other expenses covered by the lessor related to the purchase, delivery and commissioning of the asset provided for in the leasing
  4. The residual value represents the amount, in addition to the leasing installments, which, if expressly stipulated in the leasing contract, must be paid by the lessee for the benefit of the lessor in case of exercising the option to acquire the
  5. The total value represents the sum of all payments scheduled to be made by the lessee for the benefit of the lessor according to the leasing contract, including all leasing installments, advances, commissions provided by the leasing contract for the lessee, to which is added, if expressly stipulated, the residual value.

According to art.1317, the leasing contract must contain:

  1. the entry value of the property;
  2. the total value;
  3. leasing interest;
  4. the lease term;
  5. the size of the leasing installments and their maturity.

Art. 1323 Bearing the risk and costs

The risk of loss (including loss or theft) or damage to the property, regardless of whether it occurred through the act of a third party or in other circumstances, passes to the lessee when he takes possession or should have taken possession of the property.

After the risk has passed to the lessee, the lessee may not invoke the deprivation of use of the asset or its disturbance, including due to its loss, theft, loss or damage, in order to suspend the performance of its obligations towards the lessor, to reduce them or to resort to the termination of the lease. The provisions of art. 1322 para. (3) shall remain applicable.

The risk of loss (including loss or theft) or damage to the property, regardless of whether it occurred through the act of a third party or in other circumstances, passes to the lessee when he takes possession or should have taken possession of the property.

After the risk has passed to the lessee, the lessee may not invoke the deprivation of use of the asset or its disturbance, including due to its loss, theft, loss or damage, in order to suspend the performance of its obligations towards the lessor, to reduce them or to resort to the termination of the lease. The provisions of art. 1322 para. (3) shall remain applicable.

The extinction of the lessor’s obligation to ensure the possession and use of the asset as a result of the impossibility of execution does not entail the extinguishment of the lessee’s correlative obligation to pay the leasing installments, unless the impossibility is caused by a legal defect of the asset that was chosen by the lessor.

The lessee is obliged to bear the expenses of maintenance and capital and current repair of the property.