ACCOUNTING AND TAXATION OF LEASING CONTRACTS

LEASING ACCOUNTING ACCORDING TO NATIONAL REGULATIONS

Financial leasing accounting. Financial leasing accounting at the lessor

According to item 35 of the NAS “Leasing contracts”, the lessor registers the transfer of the asset in financial leasing as the output of the corresponding object. For this purpose, at the beginning of the leasing term, the following are accounted for:

• settlement of depreciation and impairment losses accumulated up to the transfer of the asset to financial leasing (if any);
• the concomitant increase of the receivables and anticipated revenues to the amount of the guaranteed reimbursable and residual value of the asset transferred in financial leasing;
• the increase of anticipated expenses and the decrease of the book value of the asset transferred in financial The asset transferred in financial leasing is reflected in the off-balance sheet account.

As the terms of payment of the leasing payments, established by the leasing contract, occur, the lessor reflects:

• reclassification of long-term receivables on leasing;
• Recognition of financial leasing income in the amount of the refundable value;
• on the part of the leasing proceeds.
• reclassification of long-term anticipated expenditure.

Lease payments comprise two main elements:

• principal (surrender value) and
• leasing interest.

The size, calculation method, periodicity of payment are established in the contract. As a rule, the leasing installments are paid in equal parts for each payment period. In this context, the need arises to distribute the leasing installments between the principal and the interest.

At the end of the management period, during the financial leasing term, the lessor reflects the share of:

• long-term receivables;
• long-term anticipated revenues;
• long-term anticipated expenditure