Lease Payments Research Articles

REFLECTIONS OF TFRS 16 LEASES STANDARD ON FINANCIAL STATEMENTS APPLICATIONS ON AIRLINE COMPANIES

This study aims to identify reflections of Turkish Financial Report 16 Leases Standard (TFRS 16) on financial statements of two airlines companies. In other words, it was tried to identify changes resulting from TFRS 16 in the study. In the study, quantitative and qualitative analysis methods were used. While quantitative method is ratio analysis, qualitative method is document analysis. To perform the ratio analysis, various assumptions were used. For example, it was assumed floating interest rate was out of the question for lease payments. To perform the analyses, information was obtained from company reports. Prior to performing the ratio analysis, the balance sheets and comprehensive income statements of two prominent airlines in Turkey for the year 2017. Specifically, it focused on converting off-balance sheet liabilities associated with operational leases into capitalised amounts. Based on results of the analyses, it was determined that due to TFRS 16. Based on the TFRS 16, the revised balance sheets show no change in current assets. Non-current assets, current liabilities, and non-current liabilities have all experienced a growth, but equity has decreased. There has been a decline in the cost of sales. This condition has resulted in a rise in gross profit.

Characteristics and comparative analysis of methods for calculating lease payments

In modern conditions of development of commodity production, leasing is one of the most promising and simple ways to upgrade fixed assets. However, in the implementation of leasing operations, both the specific features of a particular production and modern models of leasing relations should be taken into account. The main way to increase the efficiency of investments in leasing is to optimize lease payments, taking into account the specifics of production. The success and quality of these operations largely depend on the use of methodological tools based on the use of relevant accounting and analytical support in the conditions of functioning of modern models of interaction of all participants in operations. Based on this, the authors devote this article to the characteristics and comparative analysis of the main methods for calculating lease payments.

Improved Calculation of Lease Payments

Improved Calculation of Lease Payments

Neutrality Matters: Lease Payments by Lessees in Australian Taxation

Neutrality Matters: Lease Payments by Lessees in Australian Taxation

СТАН СИСТЕМИ ОБЛІКУ ТА РОЗКРИТТЯ ІНФОРМАЦІЇ ПРО ОСНОВНІ ЗАСОБИ В ФІНАНСОВІЙ ЗВІТНОСТІ ПІДПРИЄМСТВ СУСПІЛЬНОГО ІНТЕРЕСУ

The accounting system for property, plant, and equipment adopted by an enterprise must effectively capture how the organization derives economic benefits from its assets. Given that accounting for property, plant, and equipment is a critical aspect of a public interest entity’s assets, it is characterized by a considerable degree of variability, and existing recommendations for accounting and disclosure according to international standards are often insufficient. Public interest entities are required by these standards to disclose information regarding key accounting estimates in their financial statements and may also provide any additional information that management believes would help users gain a more comprehensive understanding of property, plant, and equipment. Consequently, to enhance stakeholder trust, it is essential not only to justify and disclose key accounting estimates more thoroughly but also to present data on property, plant, and equipment that reflects management objectives and the organizational, technological, and economic characteristics unique to public interest entities. The aim of this article is to examine the current state of the accounting system and the disclosure of information related to property, plant, and equipment in the financial statements of public interest entities. The article explores selected accounting models for property, plant, and equipment and examines various grouping approaches for these assets. It also analyzes the depreciation policies and compares useful life terms with the tax code of Ukraine. Additionally, the article investigates the determination of the interest rate for future lease payments associated with right-of-use assets in lease agreements. Furthermore, it assesses the state of disclosures in financial statements regarding detailed information such as unfinished capital investments, prepayments for property, plant, and equipment, the cost of fully depreciated property, plant, and equipment still in use, the carrying amount of pledged property, plant, and equipment, profits or losses from the sale of property, plant, and equipment, losses from the write-off of property, plant, and equipment, and any revaluation surplus or deficit related to property, plant, and equipment.

Evaluating the determinants of participation in conservancy land leases and its impacts on household wealth in the Maasai Mara, Kenya: Equity and gender implications

Understanding the impact of conservation interventions on local communities is important in determining their effects on livelihoods and wellbeing. However, impacts are often not uniform and there are important equity dimensions when evaluating interventions. Therefore, in this paper, we investigate determinants of participation in conservation land leases in the Mara Conservancies in southern Kenya and its impact on household wealth. We find that land ownership determines who can participate in and benefit from conservancy land lease payments, and by how much. The design of the land lease payment scheme therefore has the potential to reinforce and, in cases, amplify existing inequities as it is built upon a legacy of unequal historical land distribution processes that limit the participation of women and poor landless households. We observed significantly higher incomes amongst participant households compared to non-participants, but these differences disappeared after propensity score matching. These results suggest that the differences were not caused by participation in conservancies. Our findings suggest that the design and outcomes of land-based conservation or payment for ecosystem services schemes should consider historic and existing land tenure systems if they are to reduce inequality.

PENERAPAN KAPITALISASI SEWA TERHADAP MANAJEMEN LABA

This study aims to find out the effect of applying the mandatory capitalization lease on the application of PSAK 73 to earnings management practices. This quantitative study research uses secondary data on annual financial reports for all companies listed on the Indonesia Stock Exchange for the 2018-2021 period with the criteria for these companies disclosing an operating lease commitment and reporting minimum lease payments in the Notes to Financial Statements (CALK). The final total sample of companies is 37 companies with a total sample of 148. The data analysis technique in this study uses multiple linear regression using panel data regression and also uses a different test for the second hypothesis in this study where the data processing program used is software STATA v. 16. Based on the research results, it is found that the capitalization of leases proxied by lease liabilities has a significant negative effect on earnings management. Based on the results of the Wilcoxon test there are differences between before and after the application of capitalization leases to earnings management.

USE OF LEASING IN ACTIVITIES ENTERPRISES AND RATIONALE FOR SELECTION ITS FORMS

The article discusses the possibilities of using financial and operational leasing by an enterprise, methods of accruing leasing payments. The purpose of this study is to identify the most cost-effective sources of financing for the renewal of fixed assets. One of the options for solving this problem can be leasing, which combines many effective forms and methods of investment and allows you to take into account the interests of all parties to the transaction. Materials and methods. The object of the study was the main production assets of enterprises, the subject – an assessment of the effectiveness of the use of leasing in the activities of enterprises. The informational basis of the article was made up of: regulatory and legislative materials regulating leasing activities, theoretical foundations of leasing, reporting by Dorex JSC, Internet sources. The methodological apparatus of the study is represented by the following scientific methods: economic and statistical analysis, the method of financial ratios, financial and economic analysis. Results. Thanks to such a tool as leasing, the lessee acquires the opportunity to use the property necessary for its activities without a one-time mobilization of its own or borrowed resources. Three main methods for calculating lease payments used by domestic economists are identified. In the course of the study, using the example of Dorex JSC, the optimal form of leasing was chosen, as well as a comparison of sources of financing for the acquisition of fixed assets and an assessment of the effectiveness of the use of leasing in the activities of the organization in question. Conclusions. The use of leasing can be an effective way to mobilize and expand production, allowing to reduce the tax burden and ensure the stability of the enterprise.

Analisis Penerapan IFRS 16 Pada PT Garuda Indonesia (Persero) Tbk

The International Accounting Standards Board (IASB), issued International Financial Reporting Standards (IFRS) 16 which treats all leases as finance leases within the lessee company. The lease will be capitalized according to the present value of the lease payments and report the lease asset and liability on the company's balance sheet. With the enactment of IFRS 16, IAS 17 no longer applies. So this research highlights the changes that will occur in financial reports and financial ratios after the enactment of IFRS 16 in the company PT Garuda Indonesia Persero, Tbk which is listed on the Indonesia Stock Exchange (BEI). The method used in this research is the Library Method, namely collecting data and information from books and literature including journals from valid sources to strengthen the theoretical basis and as a basis for reference in writing research and the Document method, namely by collecting data from the object being observed, data is form the 2017 audited financial report. The results obtained from this research are that there was a change in profit of (146,764,604) due to a decrease in operating expenses of 663,142,477 due to the elimination of operating lease expenses. An increase in the number of non-current assets of 6,284,596,468. An increase in the number of long-term liabilities that are due within one year. amounting to 1,386,075,496 Additional long-term finance lease liabilities amounting to 4,751,756,386 Decreased current ratio by 21% There was an increase in Total Debt to Total Asset ratio by 14% There was an increase in Debt to Equity ratio by 525% There was an increase in Net Profit Margin by 3%

Wyoming

The Wyoming state legislature holds the responsibility of establishing and funding the education system, as outlined in the state constitution. The funding formula for K–12 education in Wyoming adjusts every 5 years and considers factors like inflation and regional cost differences. The state spends approximately $18,144 per public school student annually and allows districts to set their own open enrollment policies. Charter schools, under local school board jurisdiction, receive around $400,000 per year for lease payments, while privatized and religiously affiliated schools are ineligible to become charter schools. A failed legislative bill aimed to reimburse parents for private school or homeschooling expenses. In the 2022–2024 Wyoming state budget, $1.523 billion in state funding is allocated to the basic support formula for the 2022–2023 school year, with an additional $245.4 million for K–12 capital construction and major maintenance. Property taxes serve as the primary revenue source for K-12 education, and the state also utilizes the Permanent Wyoming Mineral Trust Fund and other permanent funds for supplemental investment income. Wyoming ranks among the top 10 states with the highest per pupil spending, with a state pupil expenditure of approximately $16,224 in 2023.

On the issue of choosing the optimal method of calculating lease payments in modern business practice

On the issue of choosing the optimal method of calculating lease payments in modern business practice

Pendampingan penerapan sistem informasi akuntasi pada proses pembuatan kontrak sewa aset PT Kereta Api Indonesia (persero) DAOP 9 Jember

Leasing assets of PT Kereta Api Indonesia (Persero) is one of PT Kereta Api Indonesia's (Persero) businesses, apart from passenger and goods transportation services. This business adds to the value of PT Kereta Api Indonesia (Persero)'s income, obtained from tenant asset rental money. The purpose of this study is to describe how the accounting information system is in the process of making asset lease contracts for PT Kereta Api Indonesia (Persero) Operational Area IX Jember. The research method used in this study is a qualitative-descriptive method. PT Kereta Api Indonesia (Persero) has two types of assets: railway and non-railway assets. The results showed that the process of making asset lease contracts for PT Kereta Api Indonesia (Persero) Operational Areas, namely submitting requests for asset leases, surveying rental locations, negotiating processes and making contract books, determining rates, and processing asset lease payments for PT Kereta Api Indonesia (Persero) Regions Operational 9 Jember. As well as following up on the obstacles PT Kereta Api Indonesia (Persero) faced if the debtors did not pay invoices or bills for payment of leased assets of PT Kereta Api Indonesia (Persero) Operational Area 9 Jember.

Factors Influencing Farm-Land Value in the Czech Republic

Czech farm-land had enjoyed considerable growth in value from 2008 to 2019. This paper identifies the main determinants of agricultural land prices variations and how these variations are influenced by urbanization, lease payments, and subsidies. These three factors were thoroughly examined for the existence of a unit root using the Augmented Dickey Fuller Test. The long-run relationship between farm-land value and these elements was estimated using the co-integration approach, specifically the Johansen procedure. The estimation confirms the existence of this long-run relationship. Short-run fluctuation in agricultural land prices is explained using the Error Correction Model. As the most important variable in the short-run performance of Czech agricultural land prices, the authors identified the influence of urbanization. This information could be used to help regulators avoid potential agricultural land value instabilities and volatility in the market and hence would contribute to sustainable land use.

Covid-19 pandemic effects and responses in the Maasai Mara conservancy

Local comparisons of effects, responses and mitigations to the Covid-19 pandemic are of vital importance in building a sustainable tourism. This is particularly the case for conservancies in Africa which is largely dependent on international tourism. Qualitative interviews were carried out in the Kenya Maasai Mara Wildlife Conservancies Association (MMWCA)with landowners, lodge managers and staff, tourism operators, community organisations and NGOs between January and May 2021. The MMWCA is an important case study as conservancies pay lease payments to more than 14,528 landowners through tourism revenues. The results show how partner conservancies took different paths in securing payments of leases and salaries by rotating staff, attracting international funding and by targeting domestic tourism. Meanwhile, landowners experimented with alternative economic activities such as cattle herding and diary production. The study shows the strength of MMWCA as a stakeholder partnership to proactively design measures including renegotiation of lease-payments, in soliciting external funding and in re-distributing funding. The positive role of domestic tourism is also stressed. The pandemic brought to the forefront discussions on equity and benefit sharing and on the sustainability of the model itself. Recommendations are given to strengthen possibilities for alternative incomes sources and for a diversification of strategies of the MMWCA partners, including the need to stimulate domestic tourism as a parallel source of income. These recommendations are also relevant to conservation areas across the African continent.

MIND THE GAAP: DETERMINANTS OF U.S. AIRLINE OPERATING CASH FLOWS

ABSTRACT The airline industry in the United States relies heavily on strong liquidity and solvency positions to fund an array of short and long-term variable and fixed costs ranging from cabin crew salaries to aircraft lease payments and debt service. Against the backdrop of these ongoing needs for cash is the ever-present risk of extraneous and expeditious demand shocks such as pandemics, terrorist incidents, and surging fuel costs. It is thus an imperative that airlines monitor their operating cash flows closely, especially when considering that many financial performance metrics are accrual-based and do not always paint a completely accurate picture of a firm’s true cash position. This study hypothesized and investigated significant determinants of operating cash flows for publicly-traded US airlines and found a statistically significant relationship between airlines operating cash flows and their total assets, income from operations, and market capitalization; which account for a large proportion of the variance in operating cash flows. This study is imperative to helping airlines understand the major determinants of operating cash flows as they look to recover from the pandemic and increase cash flow as well as maintain robust liquidity and solvency positions to fund an array of variable and fixed costs. Keywords Airlines, Operating Cash Flows, Accruals, Pandemic, Liquidity, Solvency

Contingent convertible lease modeling and credit risk management

The main objective of this study is to determine a lease agreement to finance an investment project and a solution for managing credit risk. This study investigates three types of contingent leases to reduce the costs associated with bankruptcy and compensate for the lessor's position. A leasing defaultable contract allows the lessor to obtain the rent that will be recovered if the lessee defaults. A leasing convertible contract can be automatically converted into shares when certain default conditions related to the cash flows generated by the firm are met. These conditions are triggered by the ratio of the firm's value and leasing payments. A Defaultable-Convertible-Leasing contract with a payback option grants the lessor the right but not the obligation to convert the remaining lease payments into stocks or to break up the contract and pick up the rented equipment when the firm reaches the default threshold. These contracts are motivated by contributing to the range of risk-management strategies by adding more flexibility to standard leasing contracts and contingent rents. Closed-form securities pricing solutions are set forward in a dynamic model for firms with existing assets and a growth option financed by shares and a contingent lease. Risk-neutral pricing theory and the backward induction method are used to determine the pricing of corporate securities. Numerical analysis shows that leasing convertible contracts and defaultable-convertible contracts with payback options impact the service value of the leased asset, maturity, and inefficiencies resulting from insolvency and asset substitution. An optimal conversion rate reduces inefficiencies, thus making the leasing convertible contract and defaultable-convertible-leasing contract with payback option a reliable solution to ensure business continuity and loss coverage of the leasers upon default.

Must Agreements Be Kept? Residential Leases During Covid-19*

Abstract We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one in eight did not pay full rent during the first lockdown in March–April 2020. These households held back two-thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-tenant relationship affected payments: tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contract theories to explain our findings.

A model proposal for IFRS 16 IBR adjustment based on bond market pricing

The Incremental Borrowing Rate (IBR) is generally used by companies for discounting future lease payments and calculating the value of the lease assets and liabilities under IFRS 16. According to this standard, leased asset must be considered as a collateral, and therefore the yield to be used should reflect an adequate Loss-Given Default (LGD), which may vary depending on the estimated recovery rate of the asset (machinery, real estate, vehicles, etc.). There is a lack of accounting and finance literature focused on analysing how a standard IBR should be adjusted to reflect the expected underlying asset LGD in line with IFRS principles. In this context, we propose a model that uses bond quoted information as a basis for introducing an adjustment to the standard “unsecured” IBR. The model consists of replicating the change in a certain bond yield when there is a change in the LGD (usually due to a change in the seniority level). We empirically demonstrate that the model works by using data from real bond quotations (97 outstanding bonds quoted on several secondary markets such as NY, Vienna, Frankfurt and London). The empirical analysis has been performed for two different time periods: pre-COVID 19 and post-COVID 19.

LESSONS LEARNED FROM NEW LEASING STANDARDS: VALUATION IMPLICATIONS OF VARYING IMPLICIT DISCOUNT RATES ACROSS OPERATING AND FINANCING LEASES

Under the new accounting standards for leases (ASC Topic 842), assets and liabilities relating to operating leases are recognized on corporate balance sheets. Before the adoption of ASC Topic 842, assets and liabilities relating to operating leases must be estimated by discounting future operating lease payments. Many assumptions are employed in this estimation method, including the timing and amounts of future lease payments, as well as inherent discount rates. New disclosures per ASC Topic 842 reveal that certain commonly used assumptions employed in estimating assets and liabilities related to operating leases are not accurate. This paper outlines a common method used to estimate assets and liabilities related to operating leases, including a detailed example, and discusses the impact of recently revealed assumption errors on valuation estimates.

Determining the Lease Payments for High-Tech Products

Determining the Lease Payments for High-Tech Products